Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2019 | Jul. 29, 2019 | |
Cover page. | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 30, 2019 | |
Document Transition Report | false | |
Entity File Number | 0-12247 | |
Entity Registrant Name | SOUTHSIDE BANCSHARES INC | |
Entity Central Index Key | 0000705432 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q2 | |
Entity Incorporation, State or Country Code | TX | |
Entity Tax Identification Number | 75-1848732 | |
Entity Address, Address Line One | 1201 S. Beckham Avenue, | |
Entity Address, City or Town | Tyler, | |
Entity Address, State or Province | TX | |
Entity Address, Postal Zip Code | 75701 | |
City Area Code | 903 | |
Local Phone Number | 531-7111 | |
Title of 12(b) Security | Common Stock, $1.25 par value | |
Trading Symbol | SBSI | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Shell Company | false | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Common Stock, Shares Outstanding | 33,756,168 | |
Amendment Flag | false |
CONSOLIDATED BALANCE SHEETS (UN
CONSOLIDATED BALANCE SHEETS (UNAUDITED) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 | |
ASSETS | |||
Cash and due from banks | $ 77,319 | $ 87,375 | |
Interest earning deposits | 54,642 | 23,884 | |
Federal funds sold | 560 | 9,460 | |
Total cash and cash equivalents | 132,521 | 120,719 | |
Securities available for sale, at estimated fair value | 2,088,787 | 1,989,436 | |
Securities held to maturity, at carrying value (estimated fair value of $151,307 and $159,781, respectively) | 147,091 | 162,931 | |
Federal Home Loan Bank stock, at cost | 44,718 | 32,583 | |
Equity investments | 12,374 | 12,093 | |
Loans held for sale | 1,812 | 601 | |
Loans: | |||
Loans | 3,460,143 | 3,312,799 | |
Less: Allowance for loan losses | [1] | (24,705) | (27,019) |
Net Loans | 3,435,438 | 3,285,780 | |
Premises and equipment, net | 140,105 | 135,972 | |
Operating lease right-of-use assets | 9,812 | 0 | |
Goodwill | 201,116 | 201,116 | |
Other intangible assets, net | 15,471 | 17,779 | |
Interest receivable | 25,167 | 27,287 | |
Deferred tax asset, net | 0 | 9,776 | |
Unsettled issuances of brokered certificates of deposit | 0 | 15,236 | |
Bank owned life insurance | 99,294 | 98,160 | |
Other assets | 19,164 | 14,025 | |
Total assets | 6,372,870 | 6,123,494 | |
Deposits: | |||
Noninterest bearing | 1,028,861 | 994,680 | |
Interest bearing | 3,450,395 | 3,430,350 | |
Total deposits | 4,479,256 | 4,425,030 | |
Other borrowings | 26,064 | 36,810 | |
Federal Home Loan Bank borrowings | 823,757 | 719,065 | |
Subordinated notes, net of unamortized debt issuance costs | [2] | 98,490 | 98,407 |
Trust preferred subordinated debentures, net of unamortized debt issuance costs | 60,248 | 60,246 | |
Deferred tax liability, net | 5,029 | 0 | |
Unsettled trades to purchase securities | 38,569 | 6,378 | |
Operating lease liabilities | 10,204 | 0 | |
Other liabilities | 43,488 | 46,267 | |
Total liabilities | 5,585,105 | 5,392,203 | |
Off-balance-sheet arrangements, commitments and contingencies (Note 14) | |||
Shareholders’ equity: | |||
Common stock: ($1.25 par value, 80,000,000 shares authorized, 37,866,359 shares issued at June 30, 2019 and 37,845,224 shares issued at December 31, 2018) | 47,333 | 47,307 | |
Paid-in capital | 764,220 | 762,470 | |
Retained earnings | 65,183 | 64,797 | |
Treasury stock: (shares at cost, 4,117,595 at June 30, 2019 and 4,120,475 at December 31, 2018) | (93,906) | (93,055) | |
Accumulated other comprehensive income (loss) | 4,935 | (50,228) | |
Total shareholders’ equity | 787,765 | 731,291 | |
Total liabilities and shareholders’ equity | $ 6,372,870 | $ 6,123,494 | |
[1] | The allowance for loan losses recorded on purchased credit impaired (“PCI”) loans totaled $139,000 and $302,000 as of June 30, 2019 and December 31, 2018 , respectively. | ||
[2] | This debt consists of subordinated notes with a remaining maturity greater than one year that qualify under the risk-based capital guidelines as Tier 2 capital, subject to certain limitations. |
CONSOLIDATED BALANCE SHEETS (_2
CONSOLIDATED BALANCE SHEETS (UNAUDITED) (Parenthetical) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Held-to-maturity Securities, Other Disclosure Items [Abstract] | ||
Securities held to maturity, fair value | $ 151,307 | $ 159,781 |
Shareholders' equity: | ||
Common stock, par value (in dollars per share) | $ 1.25 | $ 1.25 |
Common stock, shares authorized (in shares) | 80,000,000 | 80,000,000 |
Common stock, shares issued (in shares) | 37,866,359 | 37,845,224 |
Treasury stock (in shares) | 4,117,595 | 4,120,475 |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | ||
Interest income: | |||||
Loans | $ 42,982 | $ 39,301 | $ 84,601 | $ 78,131 | |
Taxable investment securities | 27 | 51 | 55 | 278 | |
Tax-exempt investment securities | 3,527 | 6,353 | 7,645 | 12,734 | |
Mortgage-backed securities | 13,246 | 10,210 | 25,720 | 21,104 | |
Federal Home Loan Bank stock and equity investments | 440 | 411 | 795 | 825 | |
Other interest earning assets | 450 | 471 | 883 | 919 | |
Total interest income | 60,672 | 56,797 | 119,699 | 113,991 | |
Interest expense: | |||||
Deposits | 11,457 | 8,581 | 22,698 | 16,032 | |
Federal Home Loan Bank borrowings | 3,899 | 3,007 | 8,356 | 6,639 | |
Subordinated notes | 1,410 | 1,407 | 2,810 | 2,805 | |
Trust preferred subordinated debentures | 718 | 658 | 1,447 | 1,227 | |
Other borrowings | 57 | 33 | 132 | 44 | |
Total interest expense | 17,541 | 13,686 | 35,443 | 26,747 | |
Net interest income | 43,131 | 43,111 | 84,256 | 87,244 | |
Provision for loan losses | [1] | 2,506 | 1,281 | 1,588 | 5,016 |
Net interest income after provision for loan losses | 40,625 | 41,830 | 82,668 | 82,228 | |
Noninterest income: | |||||
Deposit services | 6,652 | 6,261 | 12,638 | 12,440 | |
Net gain (loss) on sale of securities available for sale | 416 | (332) | 672 | (1,159) | |
Gain on sale of loans | 181 | 173 | 274 | 288 | |
Trust fees | 1,520 | 1,931 | 3,061 | 3,691 | |
Bank owned life insurance | 559 | 1,185 | 1,103 | 1,817 | |
Brokerage services | 477 | 506 | 994 | 956 | |
Other | 1,449 | 1,283 | 2,050 | 2,584 | |
Total noninterest income | 11,254 | 11,007 | 20,792 | 20,617 | |
Noninterest expense: | |||||
Salaries and employee benefits | 17,891 | 16,633 | 35,937 | 35,192 | |
Net occupancy | 3,289 | 3,360 | 6,464 | 6,943 | |
Acquisition expense | 0 | 1,026 | 0 | 1,858 | |
Advertising, travel & entertainment | 733 | 775 | 1,580 | 1,460 | |
ATM expense | 246 | 243 | 426 | 589 | |
Professional fees | 1,069 | 952 | 2,383 | 2,022 | |
Software and data processing | 1,086 | 939 | 2,162 | 1,962 | |
Communications | 489 | 478 | 976 | 1,016 | |
FDIC insurance | 437 | 484 | 859 | 981 | |
Amortization of intangibles | 1,129 | 1,328 | 2,308 | 2,706 | |
Other | 3,331 | 3,056 | 6,232 | 6,212 | |
Total noninterest expense | 29,700 | 29,274 | 59,327 | 60,941 | |
Income before income tax expense | 22,179 | 23,563 | 44,133 | 41,904 | |
Income tax expense | 3,569 | 3,360 | 6,706 | 5,450 | |
Net income | $ 18,610 | $ 20,203 | $ 37,427 | $ 36,454 | |
Earnings per common share - basic (in dollars per share) | $ 0.55 | $ 0.58 | $ 1.11 | $ 1.04 | |
Earnings per common share - diluted (in dollars per share) | 0.55 | 0.57 | 1.11 | 1.04 | |
Dividends paid per common share (in dollars per share) | $ 0.31 | $ 0.30 | $ 0.61 | $ 0.58 | |
[1] | Of the $2.5 million and $1.6 million provision for loan losses for the three and six months ended June 30, 2019 , $111,000 and $163,000 related to provision expense reversed on PCI loans, respectively. Of the $1.3 million and $5.0 million recorded in provision for loan losses for the three and six months ended June 30, 2018 , $358,000 related to provision expense on PCI loans. |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 18,610 | $ 20,203 | $ 37,427 | $ 36,454 |
Securities available for sale and transferred securities: | ||||
Change in unrealized holding gain (loss) on available for sale securities during the period | 32,196 | (10,371) | 78,822 | (48,154) |
Unrealized net gain on securities transferred from held to maturity to available for sale under the transition guidance enumerated in ASU 2017-12 | 0 | 0 | 0 | 11,881 |
Change in net unrealized loss on securities transferred from held to maturity to available for sale | 0 | 0 | 0 | 401 |
Reclassification adjustment for amortization related to available for sale and held to maturity debt securities | 80 | 1,252 | 571 | 1,390 |
Reclassification adjustment for net (gain) loss on sale of available for sale securities, included in net income | (416) | 332 | (672) | 1,159 |
Derivatives: | ||||
Change in net unrealized (loss) gain on effective cash flow hedge interest rate swap derivatives | (5,653) | 1,725 | (8,773) | 5,970 |
Reclassification adjustment of net gain related to derivatives designated as cash flow hedge | (642) | (331) | (1,310) | (458) |
Pension plans: | ||||
Amortization of net actuarial loss and prior service credit, included in net periodic benefit cost | 648 | 618 | 1,189 | 1,091 |
Other comprehensive income (loss), before tax | 26,213 | (6,775) | 69,827 | (26,720) |
Income tax (expense) benefit related to items of other comprehensive income (loss) | (5,505) | 1,423 | (14,664) | 5,611 |
Other comprehensive income (loss), net of tax | 20,708 | (5,352) | 55,163 | (21,109) |
Comprehensive income | $ 39,318 | $ 14,851 | $ 92,590 | $ 15,345 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (UNAUDITED) - USD ($) $ in Thousands | Total | Common Stock | Paid In Capital | Retained Earnings | Treasury Stock | Accumulated Other Comprehensive Income (Loss) |
Beginning balance, net of tax at Dec. 31, 2017 | $ 754,140 | $ 47,253 | $ 757,439 | $ 32,851 | $ (47,105) | $ (36,298) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | 16,251 | 16,251 | ||||
Other comprehensive income (loss) | (15,757) | (15,757) | ||||
Issuance of common stock for dividend reinvestment plan (10,035, 10,397, 10,565 and 10,570 shares, respectively) | 353 | 12 | 341 | |||
Stock compensation expense | 456 | 456 | ||||
Net issuance of common stock under employee stock plans (42,179, 20,872, 23,617 and 20,115 shares, respectively) | 761 | 0 | 417 | (25) | 369 | |
Cash dividends paid on common stock ($0.28, $0.30, $0.30 and $0.31 per share, respectively) | (9,808) | (9,808) | ||||
Ending balance, net of tax at Mar. 31, 2018 | 746,396 | 47,265 | 758,653 | 39,184 | (46,736) | (51,970) |
Beginning balance, net of tax at Dec. 31, 2017 | 754,140 | 47,253 | 757,439 | 32,851 | (47,105) | (36,298) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | 36,454 | |||||
Other comprehensive income (loss) | (21,109) | |||||
Ending balance, net of tax at Jun. 30, 2018 | 751,810 | 47,278 | 759,562 | 48,843 | (46,551) | (57,322) |
Beginning balance, net of tax at Mar. 31, 2018 | 746,396 | 47,265 | 758,653 | 39,184 | (46,736) | (51,970) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | 20,203 | 20,203 | ||||
Other comprehensive income (loss) | (5,352) | (5,352) | ||||
Issuance of common stock for dividend reinvestment plan (10,035, 10,397, 10,565 and 10,570 shares, respectively) | 367 | 13 | 354 | |||
Stock compensation expense | 509 | 509 | ||||
Net issuance of common stock under employee stock plans (42,179, 20,872, 23,617 and 20,115 shares, respectively) | 204 | 46 | (27) | 185 | ||
Cash dividends paid on common stock ($0.28, $0.30, $0.30 and $0.31 per share, respectively) | (10,517) | (10,517) | ||||
Ending balance, net of tax at Jun. 30, 2018 | 751,810 | 47,278 | 759,562 | 48,843 | (46,551) | (57,322) |
Beginning balance, net of tax at Dec. 31, 2018 | 731,291 | 47,307 | 762,470 | 64,797 | (93,055) | (50,228) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | 18,817 | 18,817 | ||||
Other comprehensive income (loss) | 34,455 | 34,455 | ||||
Issuance of common stock for dividend reinvestment plan (10,035, 10,397, 10,565 and 10,570 shares, respectively) | 355 | 13 | 342 | |||
Purchase of common stock (40,852 shares) | (1,325) | (1,325) | ||||
Stock compensation expense | 661 | 661 | ||||
Net issuance of common stock under employee stock plans (42,179, 20,872, 23,617 and 20,115 shares, respectively) | 338 | 0 | 109 | (32) | 261 | |
Cash dividends paid on common stock ($0.28, $0.30, $0.30 and $0.31 per share, respectively) | (10,107) | (10,107) | ||||
Ending balance, net of tax at Mar. 31, 2019 | 758,033 | 47,320 | 763,582 | 57,023 | (94,119) | (15,773) |
Beginning balance, net of tax at Dec. 31, 2018 | 731,291 | 47,307 | 762,470 | 64,797 | (93,055) | (50,228) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | 37,427 | |||||
Other comprehensive income (loss) | 55,163 | |||||
Ending balance, net of tax at Jun. 30, 2019 | 787,765 | 47,333 | 764,220 | 65,183 | (93,906) | 4,935 |
Beginning balance, net of tax at Mar. 31, 2019 | 758,033 | 47,320 | 763,582 | 57,023 | (94,119) | (15,773) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | 18,610 | 18,610 | ||||
Other comprehensive income (loss) | 20,708 | 20,708 | ||||
Issuance of common stock for dividend reinvestment plan (10,035, 10,397, 10,565 and 10,570 shares, respectively) | 349 | 13 | 336 | |||
Stock compensation expense | 571 | 571 | ||||
Net issuance of common stock under employee stock plans (42,179, 20,872, 23,617 and 20,115 shares, respectively) | (53) | 0 | (269) | 3 | 213 | |
Cash dividends paid on common stock ($0.28, $0.30, $0.30 and $0.31 per share, respectively) | (10,453) | (10,453) | ||||
Ending balance, net of tax at Jun. 30, 2019 | $ 787,765 | $ 47,333 | $ 764,220 | $ 65,183 | $ (93,906) | $ 4,935 |
CONSOLIDATED STATEMENTS OF CH_2
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (UNAUDITED) (Parenthetical) - $ / shares | 3 Months Ended | |||
Jun. 30, 2019 | Mar. 31, 2019 | Jun. 30, 2018 | Mar. 31, 2018 | |
Statement of Stockholders' Equity [Abstract] | ||||
Issuance of common stock - DRIP (in shares) | 10,570 | 10,565 | 10,397 | 10,035 |
Dividends paid on common stock (in dollars per share) | $ 0.31 | $ 0.30 | $ 0.30 | $ 0.28 |
Treasury stock shares acquired (in shares) | 40,852 | |||
Net issuance of common stock under employee stock plans (in shares) | 20,115 | 23,617 | 20,872 | 42,179 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($) $ in Thousands | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | ||
OPERATING ACTIVITIES: | |||
Net income | $ 37,427 | $ 36,454 | |
Adjustments to reconcile net income to net cash provided by operations: | |||
Depreciation and net amortization | 6,053 | 7,078 | |
Securities premium amortization (discount accretion), net | 5,946 | 7,557 | |
Loan (discount accretion) premium amortization, net | (940) | (1,712) | |
Provision for loan losses | [1] | 1,588 | 5,016 |
Stock compensation expense | 1,232 | 965 | |
Deferred tax expense | 142 | 2,438 | |
Net (gain) loss on sale of securities available for sale | (672) | 1,159 | |
Net loss on premises and equipment | 220 | 132 | |
Gross proceeds from sales of loans held for sale | 9,745 | 13,578 | |
Gross originations of loans held for sale | (10,956) | (12,159) | |
Net (gain) loss on other real estate owned | (90) | 258 | |
Net change in: | |||
Interest receivable | 2,120 | 1,391 | |
Other assets | (89) | 16,612 | |
Interest payable | 1,617 | 247 | |
Other liabilities | (18,527) | (8,484) | |
Net cash provided by operating activities | 34,816 | 70,530 | |
Securities available for sale: | |||
Purchases | (784,921) | (195,005) | |
Sales | 713,946 | 315,656 | |
Maturities, calls and principal repayments | 60,288 | 78,042 | |
Securities held to maturity: | |||
Maturities, calls and principal repayments | 15,714 | 1,767 | |
Proceeds from redemption of Federal Home Loan Bank stock and other investments | 8,788 | 13,377 | |
Purchases of Federal Home Loan Bank stock and other investments | (21,210) | (914) | |
Net loan (originations) paydowns | (150,798) | 19,722 | |
Purchases of premises and equipment | (7,900) | (5,154) | |
Proceeds from sales of premises and equipment | 34 | 1,905 | |
Proceeds from sales of other real estate owned | 490 | 771 | |
Proceeds from sales of repossessed assets | 227 | 287 | |
Net cash (used in) provided by investing activities | (165,342) | 230,454 | |
FINANCING ACTIVITIES: | |||
Net change in deposits | 69,276 | (6,866) | |
Net decrease in federal funds purchased and repurchase agreements | (10,746) | (1,211) | |
Proceeds from Federal Home Loan Bank borrowings | 2,959,200 | 1,718,000 | |
Repayment of Federal Home Loan Bank borrowings | (2,854,506) | (1,958,890) | |
Proceeds from stock option exercises | 534 | 1,084 | |
Cash paid to tax authority related to tax withholding on share-based awards | (249) | (119) | |
Purchase of common stock | (1,325) | 0 | |
Proceeds from the issuance of common stock for dividend reinvestment plan | 704 | 720 | |
Cash dividends paid | (20,560) | (20,325) | |
Net cash provided by (used in) financing activities | 142,328 | (267,607) | |
Net increase in cash and cash equivalents | 11,802 | 33,377 | |
Cash and cash equivalents at beginning of period | 120,719 | 198,692 | |
Cash and cash equivalents at end of period | 132,521 | 232,069 | |
SUPPLEMENTAL DISCLOSURES FOR CASH FLOW INFORMATION: | |||
Interest paid | 33,826 | 26,499 | |
Income taxes paid | 3,500 | 0 | |
SUPPLEMENTAL DISCLOSURES OF NONCASH INVESTING AND FINANCING ACTIVITIES: | |||
Loans transferred to other repossessed assets and real estate through foreclosure | 505 | 764 | |
Loans transferred from portfolio to held for sale | 0 | 3,984 | |
Transfer of held to maturity securities to available for sale securities | 0 | 743,421 | |
Adjustment to pension liability | (1,189) | (1,091) | |
Unsettled trades to purchase securities | $ (38,569) | $ (2,279) | |
[1] | Of the $2.5 million and $1.6 million provision for loan losses for the three and six months ended June 30, 2019 , $111,000 and $163,000 related to provision expense reversed on PCI loans, respectively. Of the $1.3 million and $5.0 million recorded in provision for loan losses for the three and six months ended June 30, 2018 , $358,000 related to provision expense on PCI loans. |
Summary of Significant Accounti
Summary of Significant Accounting and Reporting Policies | 6 Months Ended |
Jun. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Summary of Significant Accounting and Reporting Policies | Summary of Significant Accounting and Reporting Policies Basis of Presentation In this report, the words “the Company,” “we,” “us,” and “our” refer to the combined entities of Southside Bancshares, Inc. and its subsidiaries, including Southside Bank. The words “Southside” and “Southside Bancshares” refer to Southside Bancshares, Inc. The words “Southside Bank” and “the Bank” refer to Southside Bank. “Diboll” refers to Diboll State Bancshares, Inc., a bank holding company and its wholly-owned subsidiary, First Bank & Trust East Texas, acquired by Southside on November 30, 2017. The accompanying unaudited consolidated financial statements have been prepared in accordance with United States (“U.S.”) generally accepted accounting principles (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, not all information required by GAAP for complete financial statements is included in these interim statements. In the opinion of management, all adjustments necessary for a fair presentation of such financial statements have been included. Such adjustments consisted only of normal recurring items. The preparation of these consolidated financial statements in accordance with GAAP requires the use of management’s estimates. These estimates are subjective in nature and involve matters of judgment. Actual amounts could differ from these estimates. Interim results are not necessarily indicative of results for a full year. These financial statements should be read in conjunction with the financial statements and notes thereto in our Annual Report on Form 10-K for the year ended December 31, 2018 . Accounting Changes and Reclassifications Certain prior period amounts may be reclassified to conform to current year presentation. Debt Securities We adopted Accounting Standards Update (“ASU”) 2017-08, “Receivables - Nonrefundable Fees and Other Costs (Subtopic 310-20): Premium Amortization on Purchased Callable Debt Securities,” on January 1, 2019, the effective date of the guidance. Under previous GAAP, premiums on callable debt securities were generally amortized over the contractual life of the security. ASU 2017-08 requires the premium on callable debt securities to be amortized to the earliest call date. If the debt security is not called at the earliest call date, the holder of the debt security would be required to reset the effective yield on the debt security based on the payment terms required by the debt security. The guidance requires companies to apply the requirements on a modified retrospective basis through a cumulative-effect adjustment directly to retained earnings as of the beginning of the period of adoption. Adoption of this guidance on January 1, 2019, resulted in a cumulative-effect adjustment to reduce retained earnings by $16.5 million , before tax. Subsequent to January 1, 2019, we sold the majority of the securities impacted by ASU 2017-08, and thus, the standard did not materially impact our consolidated net income. Leases We evaluate our contracts at inception to determine if an arrangement is or contains a lease. Operating leases are included in operating lease right-of-use (“ROU”) assets and operating lease liabilities in our consolidated balance sheets. The Company has no finance leases. ROU assets represent our right to use an underlying asset for the lease term, and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. Our leases do not provide an implicit rate, so we use our incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The incremental borrowing rate is reevaluated upon lease modification. The operating lease ROU asset also includes any initial direct costs and prepaid lease payments made less any lease incentives. Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. We adopted ASU 2016-02, “Leases (Topic 842),” on January 1, 2019, the effective date of the guidance, using the practical expedient transition method whereby we did not revise comparative period information or disclosure. The new standard requires lessees to record assets and liabilities on the balance sheet for all leases with terms longer than 12 months. We elected the package of practical expedients permitted under the transition guidance within the new standard, which among other things, allows us to carryforward the historical lease classification. We also elected certain optional practical expedients including the hindsight practical expedient under which we considered the actual outcomes of lease renewals and terminations when measuring the lease term at adoption, and we made an accounting policy election to keep leases with an initial term of 12 months or less off of the balance sheet. We recognize these lease payments in the consolidated statements of income on a straight-line basis over the lease term. We have lease agreements with lease and non-lease components, and we have elected the practical expedient to account for these as a single lease component. Our operating leases relate primarily to bank branches and office space. In conjunction with the adoption of ASU 2016-02 on January 1, 2019, we recognized operating lease liabilities of $10.1 million and related lease assets of $9.8 million on our balance sheet. The difference between the lease assets and lease liabilities primarily consists of deferred rent liabilities reclassified upon adoption to reduce the measurement of the lease assets. The standard did not materially impact our consolidated net income and had no impact on cash flows. Accounting Pronouncements In June 2016, the FASB issued ASU 2016-13, “Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” (“CECL”). ASU 2016-13 introduces an approach based on expected losses to estimate credit losses on certain types of financial instruments. ASU 2016-13 also modifies the impairment model for AFS debt securities and provides for a simplified accounting model for purchased financial assets with credit deterioration since their origination. ASU 2016-13 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. Early adoption is permitted for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. The guidance requires companies to apply the requirements in the year of adoption through a cumulative-effect adjustment with some aspects of the update requiring a prospective transition approach. We are currently evaluating the potential impact of the pending adoption of ASU 2016-13 on our consolidated financial statements. We plan to adopt ASU 2016-13 on January 1, 2020, the effective date. We have developed a project plan, assigned a project team to complete the analysis needed to implement the guidance and engaged a third party vendor solution to assist with the application of ASU 2016-13. During the second quarter of 2019, the project team entered the parallel phase of the project during which the team will run parallel models to evaluate system processes, data generation and refine aspects of the transition to CECL. In January 2017, the FASB issued ASU 2017-04, “Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment.” ASU 2017-04 is intended to simplify goodwill impairment testing by eliminating the second step of the analysis which requires the calculation of the implied fair value of goodwill to measure a goodwill impairment charge. The update requires entities to compare the fair value of a reporting unit with its carrying amount and recognize an impairment charge for any amount by which the carrying amount exceeds the reporting unit’s fair value, to the extent that the loss recognized does not exceed the amount of goodwill allocated to that reporting unit. ASU 2017-04 is effective for annual and interim goodwill impairment tests performed in periods beginning after December 15, 2019. Early adoption is permitted for annual and interim goodwill impairment testing dates after January 1, 2017. The guidance requires companies to apply the requirements prospectively in the year of adoption. ASU 2017-04 is not expected to have a material impact on our consolidated financial statements. |
Acquisition
Acquisition | 6 Months Ended |
Jun. 30, 2019 | |
Business Combinations [Abstract] | |
Business Combination Disclosure | Acquisition On November 30, 2017 , we acquired 100% of the outstanding stock of Diboll State Bancshares, Inc. and its wholly-owned subsidiary First Bank & Trust East Texas (collectively, “Diboll”) headquartered in Diboll, Texas. Diboll operated 17 banking offices in Diboll and surrounding areas. We acquired Diboll to further expand our presence in the East Texas market. The total merger consideration for the Diboll merger was $224.3 million . The operations of Diboll were merged into the Company as of the date of the acquisition. The Company acquired loans, investment securities and deposits with fair values of $621.3 million , $234.4 million and $899.3 million , respectively, at the acquisition date. During 2017, the Company recognized goodwill of $109.7 million . As of June 30, 2019, total goodwill related to the Diboll acquisition was $109.6 million , after recording measurement period adjustments during the third quarter of 2018. The goodwill resulting from the acquisition represents the value expected from the expansion of our markets into the Southeast Texas region and the enhancement of our operations through customer synergies and efficiencies, thereby providing enhanced customer service. Goodwill of $201.1 million as of June 30, 2019 and December 31, 2018 and is not expected to be deductible for tax purposes. We recognized a core deposit intangible of $14.7 million and a trust relationship intangible of $5.4 million , at the date of acquisition, which we are amortizing using an accelerated method over a 9 - and 13 -year weighted average amortization period, respectively, consistent with expected future cash flows. |
Earnings Per Share
Earnings Per Share | 6 Months Ended |
Jun. 30, 2019 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings Per Share Earnings per share on a basic and diluted basis are calculated as follows (in thousands, except per share amounts): Three Months Ended Six Months Ended 2019 2018 2019 2018 Basic and Diluted Earnings: Net income $ 18,610 $ 20,203 $ 37,427 $ 36,454 Basic weighted-average shares outstanding 33,726 35,062 33,711 35,042 Add: Stock awards 150 171 151 175 Diluted weighted-average shares outstanding 33,876 35,233 33,862 35,217 Basic earnings per share: Net Income $ 0.55 $ 0.58 $ 1.11 $ 1.04 Diluted earnings per share: Net Income $ 0.55 $ 0.57 $ 1.11 $ 1.04 For the three and six months ended June 30, 2019 , there were approximately 480,000 and 485,000 anti-dilutive shares, respectively. For the three and six months ended June 30, 2018 , there were approximately 246,000 and 216,000 |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income (Loss) | 6 Months Ended |
Jun. 30, 2019 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Accumulated Other Comprehensive Income (Loss) | Accumulated Other Comprehensive Income (Loss) The changes in accumulated other comprehensive income (loss) by component are as follows (in thousands): Three Months Ended June 30, 2019 Pension Plans Unrealized Gains (Losses) on Securities Unrealized Gains (Losses) on Derivatives Net Prior Service (Cost) Credit Net Gain (Loss) Total Beginning balance, net of tax $ 5,901 $ 4,153 $ (140 ) $ (25,687 ) $ (15,773 ) Other comprehensive income (loss): Other comprehensive income (loss) before reclassifications 32,196 (5,653 ) — — 26,543 Reclassification adjustments included in net income (336 ) (642 ) (3 ) 651 (330 ) Income tax (expense) benefit (6,691 ) 1,322 1 (137 ) (5,505 ) Net current-period other comprehensive income (loss), net of tax 25,169 (4,973 ) (2 ) 514 20,708 Ending balance, net of tax $ 31,070 $ (820 ) $ (142 ) $ (25,173 ) $ 4,935 Six Months Ended June 30, 2019 Pension Plans Unrealized Gains (Losses) on Securities Unrealized Gains (Losses) on Derivatives Net Prior Net Gain (Loss) Total Beginning balance, net of tax $ (31,120 ) $ 7,146 $ (139 ) $ (26,115 ) $ (50,228 ) Other comprehensive income (loss): Other comprehensive income (loss) before reclassifications 78,822 (8,773 ) — — 70,049 Reclassification adjustments included in net income (101 ) (1,310 ) (4 ) 1,193 (222 ) Income tax (expense) benefit (16,531 ) 2,117 1 (251 ) (14,664 ) Net current-period other comprehensive income (loss), net of tax 62,190 (7,966 ) (3 ) 942 55,163 Ending balance, net of tax $ 31,070 $ (820 ) $ (142 ) $ (25,173 ) $ 4,935 Three Months Ended June 30, 2018 Pension Plans Unrealized Gains (Losses) on Securities Unrealized Gains (Losses) on Derivatives Net Prior Service (Cost) Credit Net Gain (Loss) Total Beginning balance, net of tax $ (35,594 ) $ 9,652 $ (134 ) $ (25,894 ) $ (51,970 ) Other comprehensive income (loss): Other comprehensive (loss) income before reclassifications (10,371 ) 1,725 — — (8,646 ) Reclassification adjustments included in net income 1,584 (331 ) (2 ) 620 1,871 Income tax benefit (expense) 1,845 (293 ) 1 (130 ) 1,423 Net current-period other comprehensive (loss) income, net of tax (6,942 ) 1,101 (1 ) 490 (5,352 ) Ending balance, net of tax $ (42,536 ) $ 10,753 $ (135 ) $ (25,404 ) $ (57,322 ) Six Months Ended June 30, 2018 Pension Plans Unrealized Gains (Losses) on Securities Unrealized Gains (Losses) on Derivatives Net Prior Service (Cost) Credit Net Gain (Loss) Total Beginning balance, net of tax $ (16,295 ) $ 6,399 $ (133 ) $ (26,269 ) $ (36,298 ) Cumulative effect of ASU 2016-01 (1) 85 — — — 85 Adjusted beginning balance, net of tax (16,210 ) 6,399 (133 ) (26,269 ) (36,213 ) Other comprehensive income (loss): Other comprehensive (loss) income before reclassifications (35,872 ) 5,970 — — (29,902 ) Reclassification adjustments included in net income 2,549 (458 ) (4 ) 1,095 3,182 Income tax benefit (expense) 6,997 (1,158 ) 2 (230 ) 5,611 Net current-period other comprehensive (loss) income, net of tax (26,326 ) 4,354 (2 ) 865 (21,109 ) Ending balance, net of tax $ (42,536 ) $ 10,753 $ (135 ) $ (25,404 ) $ (57,322 ) (1) The Company adopted ASU 2016-01 on January 1, 2018. This amount includes a reclassification for the cumulative adjustment to retained earnings of $107,000 ( $85,000 , net of tax). The reclassification adjustments out of accumulated other comprehensive income (loss) included in net income are presented below (in thousands): Three Months Ended Six Months Ended 2019 2018 2019 2018 Unrealized losses on securities transferred: Amortization of unrealized losses (1) $ (80 ) $ (1,252 ) $ (571 ) $ (1,390 ) Tax benefit 17 263 120 292 Net of tax (63 ) (989 ) (451 ) (1,098 ) Unrealized gains and losses on available for sale securities: Realized net gain (loss) on sale of securities (2) 416 (332 ) 672 (1,159 ) Tax (expense) benefit (87 ) 70 (141 ) 243 Net of tax 329 (262 ) 531 (916 ) Derivatives: Realized net gain on interest rate swap derivatives (3) 621 309 1,267 415 Tax expense (130 ) (65 ) (266 ) (87 ) Net of tax 491 244 1,001 328 Amortization of unrealized gains on terminated interest rate swap derivatives (3) 21 22 43 43 Tax expense (4 ) (5 ) (9 ) (9 ) Net of tax 17 17 34 34 Amortization of pension plan: Net actuarial loss (4) (651 ) (620 ) (1,193 ) (1,095 ) Prior service credit (4) 3 2 4 4 Total before tax (648 ) (618 ) (1,189 ) (1,091 ) Tax benefit 136 129 250 228 Net of tax (512 ) (489 ) (939 ) (863 ) Total reclassifications for the period, net of tax $ 262 $ (1,479 ) $ 176 $ (2,515 ) (1) Included in interest income on the consolidated statements of income. (2) Listed as net gain (loss) on sale of securities available for sale on the consolidated statements of income. (3) Included in interest expense for Federal Home Loan Bank of Dallas (“FHLB”) borrowings on the consolidated statements of income. (4) These accumulated other comprehensive income components are included in the computation of net periodic pension cost (income) presented in “Note 9 - Employee Benefit Plans.” |
Securities
Securities | 6 Months Ended |
Jun. 30, 2019 | |
Investments, Debt and Equity Securities [Abstract] | |
Securities | Securities Debt securities The amortized cost, gross unrealized gains and losses and estimated fair value of investment and mortgage-backed securities available for sale (“AFS”) and held to maturity (“HTM”) as of June 30, 2019 and December 31, 2018 are reflected in the tables below (in thousands): June 30, 2019 Amortized Gross Unrealized Gross Unrealized Estimated AVAILABLE FOR SALE Cost Gains Losses Fair Value Investment securities: State and political subdivisions $ 512,575 $ 16,758 $ 478 $ 528,855 Other stocks and bonds 3,000 — 41 2,959 Mortgage-backed securities: (1) Residential 1,296,888 22,944 846 1,318,986 Commercial 233,044 4,963 20 237,987 Total $ 2,045,507 $ 44,665 $ 1,385 $ 2,088,787 HELD TO MATURITY Investment securities: State and political subdivisions $ 3,018 $ 36 $ — $ 3,054 Mortgage-backed securities: (1) Residential 59,756 2,496 144 62,108 Commercial 84,317 1,984 156 86,145 Total $ 147,091 $ 4,516 $ 300 $ 151,307 December 31, 2018 Amortized Gross Unrealized Gross Unrealized Estimated AVAILABLE FOR SALE Cost Gains Losses Fair Value Investment securities: State and political subdivisions $ 728,142 $ 6,115 $ 17,656 $ 716,601 Other stocks and bonds 3,000 — 291 2,709 Mortgage-backed securities: (1) Residential 738,585 3,498 9,111 732,972 Commercial 543,758 941 7,545 537,154 Total $ 2,013,485 $ 10,554 $ 34,603 $ 1,989,436 HELD TO MATURITY Investment securities: State and political subdivisions $ 3,083 $ 5 $ 42 $ 3,046 Mortgage-backed securities: (1) Residential 59,655 154 1,140 58,669 Commercial 100,193 201 2,328 98,066 Total $ 162,931 $ 360 $ 3,510 $ 159,781 (1) All mortgage-backed securities issued and/or guaranteed by U.S. government agencies or U.S. government-sponsored enterprises. From time to time, we have transferred securities from AFS to HTM due to overall balance sheet strategies. The remaining net unamortized, unrealized loss on the transferred securities included in AOCI in the accompanying balance sheets totaled $4.0 million ( $3.1 million , net of tax) at June 30, 2019 and $15.3 million ( $12.1 million , net of tax) at December 31, 2018 . Any net unrealized gain or loss on the transferred securities included in AOCI at the time of transfer will be amortized over the remaining life of the underlying security as an adjustment to the yield on those securities. Securities transferred with losses included in AOCI continue to be included in management’s assessment for other-than-temporary impairment for each individual security. There were no securities transferred from AFS to HTM during the six months ended June 30, 2019 or the year ended December 31, 2018 . On January 1, 2019, we adopted ASU 2017-08, “Receivables - Nonrefundable Fees and Other Costs (Subtopic 310-20): Premium Amortization on Purchased Callable Debt Securities,” and in conjunction with the adoption recognized a cumulative effect adjustment to reduce retained earnings by $16.5 million , before tax, related to premiums on callable debt securities. Prior to January 1, 2019, premiums were amortized over the contractual life of the security. With the adoption of ASU 2017-08, premiums on debt securities will be amortized to the earliest call date. The following tables represent the estimated fair value and unrealized loss on investment and mortgage-backed securities AFS and HTM as of June 30, 2019 and December 31, 2018 (in thousands): June 30, 2019 Less Than 12 Months More Than 12 Months Total Fair Value Unrealized Loss Fair Value Unrealized Loss Fair Value Unrealized Loss AVAILABLE FOR SALE Investment securities: State and political subdivisions $ 2,281 $ 10 $ 28,087 $ 468 $ 30,368 $ 478 Other stocks and bonds 2,959 41 — — 2,959 41 Mortgage-backed securities: Residential 629 2 91,649 844 92,278 846 Commercial — — 15,033 20 15,033 20 Total $ 5,869 $ 53 $ 134,769 $ 1,332 $ 140,638 $ 1,385 HELD TO MATURITY Mortgage-backed securities: Residential $ — $ — $ 2,579 $ 144 $ 2,579 $ 144 Commercial — — 14,701 156 14,701 156 Total $ — $ — $ 17,280 $ 300 $ 17,280 $ 300 December 31, 2018 Less Than 12 Months More Than 12 Months Total Fair Value Unrealized Fair Value Unrealized Fair Value Unrealized AVAILABLE FOR SALE Investment securities: State and political subdivisions $ 98,112 $ 899 $ 399,205 $ 16,757 $ 497,317 $ 17,656 Other stocks and bonds 2,709 291 — — 2,709 291 Mortgage-backed securities: Residential 5,552 27 488,334 9,084 493,886 9,111 Commercial 9,529 30 457,704 7,515 467,233 7,545 Total $ 115,902 $ 1,247 $ 1,345,243 $ 33,356 $ 1,461,145 $ 34,603 HELD TO MATURITY Investment securities: State and political subdivisions $ 235 $ 1 $ 2,022 $ 41 $ 2,257 $ 42 Mortgage-backed securities: Residential 4,826 60 51,046 1,080 55,872 1,140 Commercial 399 2 89,168 2,326 89,567 2,328 Total $ 5,460 $ 63 $ 142,236 $ 3,447 $ 147,696 $ 3,510 We review those securities in an unrealized loss position for significant differences between fair value and the cost basis to evaluate if a classification of other-than-temporary impairment is warranted. In estimating other-than-temporary impairment losses, management considers, among other things, the length of time and the extent to which the fair value has been less than cost and the financial condition and near-term prospects of the issuer. We consider an other-than-temporary impairment to have occurred when there is an adverse change in expected cash flows. When it is determined that a decline in fair value of AFS and HTM securities is other-than-temporary, the carrying value of the security is reduced to its estimated fair value, with a corresponding charge to earnings for the credit portion and a charge to other comprehensive income for the noncredit portion. Based upon the length of time and the extent to which fair value is less than cost, we believe that none of the securities with an unrealized loss have other-than-temporary impairment at June 30, 2019 . The majority of the securities in an unrealized loss position are highly rated Texas municipal securities and U.S. agency MBS where the unrealized loss is a direct result of the change in interest rates and spreads. For those securities in an unrealized loss position, we do not currently intend to sell the securities and it is not more likely than not that we will be required to sell the securities before the anticipated recovery of their amortized cost basis. To the best of management’s knowledge and based on our consideration of the qualitative factors associated with each security, there were no securities in our investment and MBS portfolio with an other-than-temporary impairment at June 30, 2019 . The following table reflects interest income recognized on securities for the periods presented (in thousands): Three Months Ended 2019 2018 U.S. Treasury $ — $ 23 State and political subdivisions 3,527 6,353 Other stocks and bonds 27 28 Mortgage-backed securities 13,246 10,210 Total interest income on securities $ 16,800 $ 16,614 Six Months Ended 2019 2018 U.S. Treasury $ — $ 131 U.S. government agency debentures — 89 State and political subdivisions 7,645 12,734 Other stocks and bonds 55 58 Mortgage-backed securities 25,720 21,104 Total interest income on securities $ 33,420 $ 34,116 There was a $672,000 net realized gain from the AFS securities portfolio for the six months ended June 30, 2019 , which consisted of $5.5 million in realized gains and $4.9 million in realized losses. There was a $1.2 million net realized loss from the AFS securities portfolio for the six months ended June 30, 2018 , which consisted of $2.7 million in realized losses and $1.5 million in realized gains. There were no sales from the HTM portfolio during the six months ended June 30, 2019 or 2018 . We calculate realized gains and losses on sales of securities under the specific identification method. The amortized cost and estimated fair value of AFS and HTM securities at June 30, 2019 , are presented below by contractual maturity (in thousands). Expected maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations. MBS are presented in total by category due to the fact that MBS typically are issued with stated principal amounts, and the securities are backed by pools of mortgages that have loans with varying maturities. The characteristics of the underlying pool of mortgages, such as fixed-rate or adjustable-rate, as well as prepayment risk, are passed on to the security holder. The term of a mortgage-backed pass-through security thus approximates the term of the underlying mortgages and can vary significantly due to prepayments. June 30, 2019 Amortized Cost Fair Value AVAILABLE FOR SALE Investment securities: Due in one year or less $ 3,349 $ 3,363 Due after one year through five years 8,406 8,469 Due after five years through ten years 28,488 29,573 Due after ten years 475,332 490,409 515,575 531,814 Mortgage-backed securities 1,529,932 1,556,973 Total $ 2,045,507 $ 2,088,787 June 30, 2019 Amortized Cost Fair Value HELD TO MATURITY Investment securities: Due in one year or less $ 115 $ 115 Due after one year through five years 1,658 1,675 Due after five years through ten years 1,245 1,264 Due after ten years — — 3,018 3,054 Mortgage-backed securities: 144,073 148,253 Total $ 147,091 $ 151,307 Investment securities and MBS with carrying values of $949.2 million and $1.08 billion were pledged as of June 30, 2019 and December 31, 2018 , respectively, to collateralize FHLB borrowings, repurchase agreements and public funds or for other purposes as required by law. Equity Investments Equity investments on our consolidated balance sheets include Community Reinvestment Act funds with a readily determinable fair value as well as equity investments without readily determinable fair values. At June 30, 2019 and December 31, 2018 , we had equity investments recorded in our consolidated balance sheets of $12.4 million and $12.1 million , respectively. Any realized and unrealized gains and losses on equity investments are reported in income. Equity investments without readily determinable fair values are recorded at cost less any impairment, if any. The following is a summary of unrealized and realized gains and losses on equity investments recognized in other noninterest income in the consolidated statements of income during the three and six months ended June 30, 2019 and 2018 (in thousands): Three Months Ended Six Months Ended 2019 2018 2019 2018 Net gains (losses) recognized during the period on equity investments $ 87 $ (42 ) $ 163 $ (134 ) Less: Net gains (losses) recognized during the period on equity investments sold during the period — — — — Unrealized gains (losses) recognized during the reporting period on equity investments still held at the reporting date $ 87 $ (42 ) $ 163 $ (134 ) Equity investments are assessed quarterly for other-than-temporary impairment. Based upon that evaluation, management does no t consider any of our equity investments to be other-than-temporarily impaired at June 30, 2019 . FHLB Stock Our FHLB stock, which has limited marketability, is carried at cost and is assessed quarterly for other-than-temporary impairment. Based upon evaluation by management at June 30, 2019 , our FHLB stock was not impaired and thus was no t considered to be other-than-temporarily impaired. |
Loans and Allowance for Probabl
Loans and Allowance for Probable Loan Losses | 6 Months Ended |
Jun. 30, 2019 | |
Receivables [Abstract] | |
Loans and Allowance for Probable Loan Losses | Loans and Allowance for Loan Losses Loans in the accompanying consolidated balance sheets are classified as follows (in thousands): June 30, 2019 December 31, 2018 Real estate loans: Construction $ 579,565 $ 507,732 1-4 family residential 782,073 794,499 Commercial 1,251,248 1,194,118 Commercial loans 389,521 356,649 Municipal loans 357,028 353,370 Loans to individuals 100,708 106,431 Total loans 3,460,143 3,312,799 Less: Allowance for loan losses (1) 24,705 27,019 Net loans $ 3,435,438 $ 3,285,780 (1) The allowance for loan losses recorded on purchased credit impaired (“PCI”) loans totaled $139,000 and $302,000 as of June 30, 2019 and December 31, 2018 , respectively. Construction Real Estate Loans Our construction loans are collateralized by property located primarily in or near the market areas we serve. A number of our construction loans will be owner occupied upon completion. Construction loans for non-owner occupied projects are financed, but these typically have cash flows from leases with tenants, secondary sources of repayment, and in some cases, additional collateral. Our construction loans have both adjustable and fixed interest rates during the construction period. Construction loans to individuals are typically priced and made with the intention of granting the permanent loan on the property. Speculative and commercial construction loans are subject to underwriting standards similar to that of the commercial portfolio. Owner occupied 1-4 family residential construction loans are subject to the underwriting standards of the permanent loan. 1-4 Family Residential Real Estate Loans Residential loan originations are generated by our loan officers, in-house origination staff, marketing efforts, present customers, walk-in customers and referrals from real estate agents and builders. We focus our lending efforts primarily on the origination of loans secured by first mortgages on owner occupied 1-4 family residences. Substantially all of our 1-4 family residential originations are secured by properties located in or near our market areas. Our 1-4 family residential loans generally have maturities ranging from five to 30 years. These loans are typically fully amortizing with monthly payments sufficient to repay the total amount of the loan. Our 1-4 family residential loans are made at both fixed and adjustable interest rates. Underwriting for 1-4 family residential loans includes debt-to-income analysis, credit history analysis, appraised value and down payment considerations. Changes in the market value of real estate can affect the potential losses in the portfolio. Commercial Real Estate Loans Commercial real estate loans as of June 30, 2019 consisted of $1.14 billion of owner and non-owner occupied real estate, $96.3 million of loans secured by multi-family properties and $18.1 million of loans secured by farmland. Commercial real estate loans primarily include loans collateralized by retail, commercial office buildings, multi-family residential buildings, medical facilities and offices, senior living, assisted living and skilled nursing facilities, warehouse facilities, hotels and churches. Management does not consider there to be a risk in any one industry type. In determining whether to originate commercial real estate loans, we generally consider such factors as the financial condition of the borrower and the debt service coverage of the property. Commercial real estate loans are made at both fixed and adjustable interest rates for terms generally up to 20 years. Commercial Loans Our commercial loans are diversified loan types including short-term working capital loans for inventory and accounts receivable and short- and medium-term loans for equipment or other business capital expansion. Management does not consider there to be a concentration of risk in any one industry type. In our commercial loan underwriting, we assess the creditworthiness, ability to repay and the value and liquidity of the collateral being offered. Terms of commercial loans are generally commensurate with the useful life of the collateral offered. Municipal Loans We have a specific lending department that makes loans to municipalities and school districts primarily throughout the state of Texas, with a small percentage originating outside of the state. The majority of the loans to municipalities and school districts have tax or revenue pledges and in some cases are additionally supported by collateral. Municipal loans made without a direct pledge of taxes or revenues are usually made based on some type of collateral that represents an essential service. Lending money directly to these municipalities allows us to earn a higher yield than we could if we purchased municipal securities for similar durations. Loans to Individuals Substantially all originations of our loans to individuals are made to consumers in our market areas. The majority of loans to individuals are collateralized by titled equipment, which are primarily automobiles. Loan terms vary according to the type and value of collateral, length of contract and creditworthiness of the borrower. The underwriting standards we employ for consumer loans include an application, a determination of the applicant’s payment history on other debts, with the greatest weight being given to payment history with us and an assessment of the borrower’s ability to meet existing obligations and payments on the proposed loan. Although creditworthiness of the applicant is a primary consideration, the underwriting process also includes a comparison of the value of the collateral, if any, in relation to the proposed loan amount. Most of our loans to individuals are collateralized, which management believes assists in limiting our exposure. Allowance for Loan Losses The allowance for loan losses is based on the most current review of the loan portfolio and is a result of multiple processes. First, we utilize historical net charge-off data to establish general reserve amounts for each class of loans. The historical charge-off figure is further adjusted through qualitative factors that include general trends in past dues, nonaccruals and classified loans to more effectively and promptly react to both positive and negative movements not reflected in the historical data. Second, our lenders have the primary responsibility for identifying problem loans based on customer financial stress and underlying collateral. These recommendations are reviewed by senior loan administration, the special assets department and the loan review department on a monthly basis. Third, the loan review department independently reviews the portfolio on an annual basis. The loan review department follows a board-approved annual loan review scope. The loan review scope encompasses a number of considerations including the size of the loan, the type of credit extended, the seasoning of the loan and the performance of the loan. The loan review scope, as it relates to size, focuses more on larger dollar loan relationships, typically aggregate debt of $500,000 or greater. The loan review officer also reviews specific reserves compared to general reserves to determine trends in comparative reserves as well as losses not reserved for prior to charge-off to determine the effectiveness of the specific reserve process. At each review, a subjective analysis methodology is used to grade the respective loan. Categories of grading vary in severity from loans that do not appear to have a significant probability of loss at the time of review to loans that indicate a probability that the entire balance of the loan will be uncollectible. If at the time of the review we determine it is probable we will not collect the principal and interest cash flows contractually due on the loan, estimates of future expected cash flows or appraisals of the collateral securing the debt are used to determine the necessary allowance. The internal loan review department maintains a list (“Watch List”) of all loans or loan relationships that are graded as having more than the normal degree of risk associated with them. In addition, a list of specifically reserved loans or loan relationships of $150,000 or more is updated on a quarterly basis in order to properly determine necessary allowances and keep management informed on the status of attempts to correct the deficiencies noted with respect to the loans. We calculate historical loss ratios for pools of loans with similar characteristics based on the proportion of actual charge-offs experienced, consistent with the characteristics of remaining loans, to the total population of loans in the pool. The historical gross loss ratios are updated quarterly based on actual charge-off experience and adjusted for qualitative factors. All loans are subject to individual analysis if determined to be impaired with the exception of consumer loans and loans secured by 1-4 family residential loans. Industry and our own experience indicates that a portion of our loans will become delinquent and a portion of our loans will require partial or full charge-off. Regardless of the underwriting criteria utilized, losses may occur as a result of various factors beyond our control, including, among other things, changes in market conditions affecting the value of properties used as collateral for loans and problems affecting the credit worthiness of the borrower and the ability of the borrower to make payments on the loan. Our determination of the appropriateness of the allowance for loan losses is based on various considerations, including an analysis of the risk characteristics of various classifications of loans, previous loan loss experience, specific loans which have loan loss potential, delinquency trends, estimated fair value of the underlying collateral, current economic conditions and geographic and industry loan concentration. Credit Quality Indicators We categorize loans into risk categories on an ongoing basis based on relevant information about the ability of borrowers to service their debt such as: current financial information, historical payment experience, credit documentation, public information and current economic trends, among other factors. We use the following definitions for risk ratings: • Pass (Rating 1 – 4) – This rating is assigned to all satisfactory loans. This category, by definition, consists of acceptable credit. Credit and collateral exceptions should not be present, although their presence would not necessarily prohibit a loan from being rated Pass, if deficiencies are in the process of correction. These loans are not included in the Watch List. • Pass Watch (Rating 5) – These loans require some degree of special treatment, but not due to credit quality. This category does not include loans specially mentioned or adversely classified; however, particular attention is warranted to characteristics such as: ◦ A lack of, or abnormally extended payment program; ◦ A heavy degree of concentration of collateral without sufficient margin; ◦ A vulnerability to competition through lesser or extensive financial leverage; and ◦ A dependence on a single or few customers or sources of supply and materials without suitable substitutes or alternatives. • Special Mention (Rating 6) – A Special Mention loan has potential weaknesses that deserve management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or in our credit position at some future date. Special Mention loans are not adversely classified and do not expose us to sufficient risk to warrant adverse classification. • Substandard (Rating 7) – Substandard loans are inadequately protected by the current sound worth and paying capacity of the obligor or of the collateral pledged, if any. Loans so classified must have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the Bank will sustain some loss if the deficiencies are not corrected. • Doubtful (Rating 8) – Loans classified as Doubtful have all the weaknesses inherent in those classified Substandard with the added characteristic that the weaknesses make collection or liquidation, in full, on the basis of currently known facts, conditions and values, highly questionable and improbable. All accruing loans are reserved for as a group of similar type credits and included in the general portion of the allowance for loan losses. Loans to individuals and 1-4 family residential loans, including loans not accruing, are collectively evaluated and included in the general portion of the allowance for loan losses. All loans considered troubled debt restructurings (“TDR”) are evaluated individually for impairment. The general portion of the loan loss allowance is reflective of historical charge-off levels for similar loans adjusted for changes in current conditions and other relevant factors. These factors are likely to cause estimated losses to differ from historical loss experience and include: • Changes in lending policies or procedures, including underwriting, collection, charge-off and recovery procedures; • Changes in local, regional and national economic and business conditions, including entry into new markets; • Changes in the volume or type of credit extended; • Changes in the experience, ability and depth of lending management; • Changes in the volume and severity of past due, nonaccrual, restructured, or classified loans; • Changes in charge-off trends; • Changes in loan review or Board oversight; • Changes in the level of concentrations of credit; and • Changes in external factors, such as competition and legal and regulatory requirements. These factors are also considered for the non-PCI purchased loan portfolio specifically in regards to changes in credit quality, past due, nonaccrual and charge-off trends. The following tables detail activity in the allowance for loan losses by portfolio segment for the periods presented (in thousands): Three Months Ended June 30, 2019 Real Estate Construction 1-4 Family Residential Commercial Commercial Loans Municipal Loans Loans to Individuals Total Balance at beginning of period $ 4,259 $ 3,382 $ 10,660 $ 4,287 $ 508 $ 1,059 $ 24,155 Provision (reversal) for loan losses (2) (660 ) 137 1,516 1,266 22 225 2,506 Loans charged off — — (1,661 ) (130 ) — (606 ) (2,397 ) Recoveries of loans charged off — 3 19 123 — 296 441 Balance at end of period $ 3,599 $ 3,522 $ 10,534 $ 5,546 $ 530 $ 974 $ 24,705 Six Months Ended June 30, 2019 Real Estate Construction 1-4 Family Residential Commercial Commercial Loans Municipal Loans Loans to Individuals Total Balance at beginning of period $ 3,597 $ 3,844 $ 13,968 $ 3,974 $ 525 $ 1,111 $ 27,019 Provision (reversal) for loan losses (2) 2 (310 ) (596 ) 2,000 5 487 1,588 Loans charged off — (18 ) (2,876 ) (581 ) — (1,207 ) (4,682 ) Recoveries of loans charged off — 6 38 153 — 583 780 Balance at end of period $ 3,599 $ 3,522 $ 10,534 $ 5,546 $ 530 $ 974 $ 24,705 Three Months Ended June 30, 2018 Real Estate Construction 1-4 Family Residential Commercial Commercial Loans Municipal Loans Loans to Individuals Total Balance at beginning of period $ 3,597 $ 2,377 $ 14,089 $ 2,385 $ 851 $ 921 $ 24,220 Provision (reversal) for loan losses (2) 244 403 (57 ) 328 8 355 1,281 Loans charged off — (57 ) — (172 ) — (688 ) (917 ) Recoveries of loans charged off — 7 4 19 — 458 488 Balance at end of period $ 3,841 $ 2,730 $ 14,036 $ 2,560 $ 859 $ 1,046 $ 25,072 Six Months Ended June 30, 2018 Real Estate Construction 1-4 Family Residential Commercial Commercial Loans Municipal Loans Loans to Individuals Total Balance at beginning of period (1) $ 3,676 $ 2,445 $ 10,821 $ 2,094 $ 860 $ 885 $ 20,781 Provision (reversal) for loan losses (2) 179 321 3,209 661 (1 ) 647 5,016 Loans charged off (14 ) (57 ) — (257 ) — (1,356 ) (1,684 ) Recoveries of loans charged off — 21 6 62 — 870 959 Balance at end of period $ 3,841 $ 2,730 $ 14,036 $ 2,560 $ 859 $ 1,046 $ 25,072 (1) Loans acquired with the Diboll acquisition were measured at fair value on November 30, 2017 with no carryover of allowance for loan losses. (2) Of the $2.5 million and $1.6 million provision for loan losses for the three and six months ended June 30, 2019 , $111,000 and $163,000 related to provision expense reversed on PCI loans, respectively. Of the $1.3 million and $5.0 million recorded in provision for loan losses for the three and six months ended June 30, 2018 , $358,000 related to provision expense on PCI loans. The following tables present the balance in the allowance for loan losses by portfolio segment based on impairment method (in thousands): June 30, 2019 Real Estate Construction 1-4 Family Residential Commercial Commercial Loans Municipal Loans Loans to Individuals Total Ending balance – individually evaluated for impairment (1) $ 23 $ 66 $ 1,408 $ 782 $ — $ 90 $ 2,369 Ending balance – collectively evaluated for impairment 3,576 3,456 9,126 4,764 530 884 22,336 Balance at end of period $ 3,599 $ 3,522 $ 10,534 $ 5,546 $ 530 $ 974 $ 24,705 December 31, 2018 Real Estate Construction 1-4 Family Residential Commercial Commercial Loans Municipal Loans Loans to Individuals Total Ending balance – individually evaluated for impairment (1) $ 13 $ 40 $ 5,337 $ 368 $ 1 $ 149 $ 5,908 Ending balance – collectively evaluated for impairment 3,584 3,804 8,631 3,606 524 962 21,111 Balance at end of period $ 3,597 $ 3,844 $ 13,968 $ 3,974 $ 525 $ 1,111 $ 27,019 (1) The allowance for loan losses on PCI loans totaled $139,000 and $302,000 as of June 30, 2019 and December 31, 2018 , respectively. The following tables present the recorded investment in loans by portfolio segment based on impairment method (in thousands): June 30, 2019 Real Estate Construction 1-4 Family Residential Commercial Commercial Loans Municipal Loans Loans to Individuals Total Loans individually evaluated for impairment $ 200 $ 1,268 $ 21,361 $ 2,523 $ 429 $ 136 $ 25,917 Loans collectively evaluated for impairment 579,226 772,725 1,198,899 385,322 356,599 100,354 3,393,125 Purchased credit impaired loans 139 8,080 30,988 1,676 — 218 41,101 Total ending loan balance $ 579,565 $ 782,073 $ 1,251,248 $ 389,521 $ 357,028 $ 100,708 $ 3,460,143 December 31, 2018 Real Estate Construction 1-4 Family Residential Commercial Commercial Loans Municipal Loans Loans to Individuals Total Loans individually evaluated for impairment $ 12 $ 1,215 $ 33,013 $ 1,394 $ 429 $ 184 $ 36,247 Loans collectively evaluated for impairment 507,564 782,614 1,128,220 353,036 352,941 105,775 3,230,150 Purchased credit impaired loans 156 10,670 32,885 2,219 — 472 46,402 Total ending loan balance $ 507,732 $ 794,499 $ 1,194,118 $ 356,649 $ 353,370 $ 106,431 $ 3,312,799 The following tables set forth credit quality indicators by class of loans for the periods presented (in thousands): June 30, 2019 Pass Pass Watch (1) Special Mention (1) Substandard (1) Doubtful (1) Total Real estate loans: Construction $ 579,253 $ 47 $ — $ 265 $ — $ 579,565 1-4 family residential 776,375 31 166 4,784 717 782,073 Commercial 1,150,646 55,208 7,444 37,793 157 1,251,248 Commercial loans 375,664 3,362 6,063 4,163 269 389,521 Municipal loans 357,028 — — — — 357,028 Loans to individuals 100,030 — — 380 298 100,708 Total $ 3,338,996 $ 58,648 $ 13,673 $ 47,385 $ 1,441 $ 3,460,143 December 31, 2018 Pass Pass Watch (1) Special Mention (1) Substandard (1) Doubtful (1) Total Real estate loans: Construction $ 507,529 $ 163 $ — $ 28 $ 12 $ 507,732 1-4 family residential 787,516 37 100 5,489 1,357 794,499 Commercial 1,067,874 11,479 26,490 87,767 508 1,194,118 Commercial loans 349,495 520 3,189 2,988 457 356,649 Municipal loans 353,370 — — — — 353,370 Loans to individuals 105,536 4 4 678 209 106,431 Total $ 3,171,320 $ 12,203 $ 29,783 $ 96,950 $ 2,543 $ 3,312,799 (1) Includes PCI loans comprised of $15,000 pass watch, $217,000 special mention, $2.7 million substandard and $305,000 doubtful as of June 30, 2019 . Includes PCI loans comprised of $22,000 pass watch, $859,000 special mention, $3.9 million substandard and $1.2 million doubtful as of December 31, 2018 . Nonperforming Assets and Past Due Loans Nonaccrual loans are loans 90 days or more delinquent and collection in full of both the principal and interest is not expected. Additionally, some loans that are not delinquent or that are delinquent less than 90 days may be placed on nonaccrual status if it is probable that we will not receive contractual principal and interest payments in accordance with the terms of the respective loan agreement. When a loan is categorized as nonaccrual, the accrual of interest is discontinued and any accrued balance is reversed for financial statement purposes. Payments received on nonaccrual loans are applied to the outstanding principal balance. Payments of contractual interest are recognized as income only to the extent that full recovery of the principal balance of the loan is reasonably certain. Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured. Other factors, such as the value of collateral securing the loan and the financial condition of the borrower, are considered in judgments as to potential loan loss. Nonaccrual loans and accruing loans past due more than 90 days include both smaller balance homogeneous loans that are collectively evaluated for impairment and individually classified impaired loans. PCI loans are recorded at fair value at acquisition date. Although the PCI loans may be contractually delinquent, we do not classify these loans as past due or nonperforming when the timing and amount of expected cash flows can be reasonably estimated, as the loans were written down to fair value at the acquisition date and the accretable yield is recognized in interest income over the remaining life of the loan. However, subsequent to acquisition, we reassess PCI loans for additional impairment and record additional impairment in the event we conclude it is probable that we will be unable to collect all cash flows originally expected to be collected at acquisition plus any additional cash flows expected to be collected due to changes in estimates after acquisition. All such PCI loans for which we recognize subsequent impairment are reported as impaired loans in the financial statements. The following table sets forth nonperforming assets for the periods presented (in thousands): June 30, 2019 December 31, 2018 Nonaccrual loans (1) (2) $ 16,376 $ 35,770 Accruing loans past due more than 90 days (1) — — Restructured loans (3) 11,918 5,930 Other real estate owned 1,069 1,206 Repossessed assets — — Total nonperforming assets $ 29,363 $ 42,906 (1) Excludes PCI loans measured at fair value at acquisition if the timing and amount of cash flows expected to be collected from those sales can be reasonably estimated. (2) Includes $8.9 million and $10.9 million of restructured loans as of June 30, 2019 and December 31, 2018 , respectively. (3) Includes $776,000 and $3.1 million in PCI loans restructured as of June 30, 2019 and December 31, 2018 , respectively. Foreclosed assets include other real estate owned and repossessed assets. For 1-4 family residential real estate properties, a loan is recognized as a foreclosed property once legal title to the real estate property has been received upon completion of foreclosure or the borrower has conveyed all interest in the residential property through a deed in lieu of foreclosure. There were $12,000 and $147,000 in loans secured by 1-4 family residential properties for which formal foreclosure proceedings were in process as of June 30, 2019 and December 31, 2018 , respectively. The following table sets forth the recorded investment in nonaccrual loans by class of loans for the periods presented (in thousands). The table excludes PCI loans measured at fair value at acquisition: Nonaccrual Loans June 30, 2019 December 31, 2018 Real estate loans: Construction $ 200 $ 12 1-4 family residential 1,418 2,202 Commercial 13,383 32,599 Commercial loans 1,047 639 Loans to individuals 328 318 Total $ 16,376 $ 35,770 Loans are considered impaired if, based on current information and events, it is probable we will be unable to collect the scheduled payments of principal and interest when due according to the contractual terms of the loan agreement. Impairment is evaluated in total for smaller-balance loans of a similar nature and on an individual loan basis for larger loans. The measurement of loss on impaired loans is generally based on the fair value of the collateral less selling costs if repayment is expected solely from the collateral or the present value of the expected future cash flows discounted at the historical effective interest rate stipulated in the loan agreement. In measuring the fair value of the collateral, in addition to relying on third party appraisals, we use assumptions, such as discount rates, and methodologies, such as comparison to the recent selling price of similar assets, consistent with those that would be utilized by unrelated third parties performing a valuation. Loans that are evaluated and determined not to meet the definition of an impaired loan are reserved for at the general reserve rate for its appropriate class. At the time a loss is probable in the collection of contractual amounts, specific reserves are allocated. Loans are charged off to the liquidation value of the collateral net of liquidation costs, if any, when deemed uncollectible or as soon as collection by liquidation is evident. The following tables set forth impaired loans by class of loans, including the unpaid contractual principal balance, the recorded investment and the related allowance for loan losses for the periods presented (in thousands). Impaired loans include restructured and nonaccrual loans for which the allowance was measured in accordance with section 310-10 of ASC Topic 310, “Receivables.” There were no impaired loans recorded without an allowance as of June 30, 2019 or December 31, 2018 . June 30, 2019 Unpaid Contractual Principal Balance Recorded Investment Related Allowance for Loan Losses Real estate loans: Construction $ 356 $ 323 $ 23 1-4 family residential 8,646 7,491 66 Commercial 26,198 22,999 1,408 Commercial loans 4,033 3,449 782 Municipal loans 429 429 — Loans to individuals 481 354 90 Total (1) $ 40,143 $ 35,045 $ 2,369 December 31, 2018 Unpaid Contractual Principal Balance Recorded Investment Related Allowance for Loan Losses Real estate loans: Construction $ 182 $ 148 $ 13 1-4 family residential 6,507 5,923 40 Commercial 36,457 34,744 5,337 Commercial loans 2,874 2,366 368 Municipal loans 429 429 1 Loans to individuals 825 657 149 Total (1) $ 47,274 $ 44,267 $ 5,908 (1) Includes $9.1 million and $8.0 million of PCI loans that experienced deterioration in credit quality subsequent to the acquisition date as of June 30, 2019 and December 31, 2018 , respectively. The following tables present the aging of the recorded investment in past due loans by class of loans (in thousands): June 30, 2019 30-59 Days Past Due 60-89 Days Past Due Greater than 90 Days Past Due Total Past Due Current (1) Total Real estate loans: Construction $ 343 $ 276 $ 193 $ 812 $ 578,753 $ 579,565 1-4 family residential 2,250 1,330 293 3,873 778,200 782,073 Commercial 1,625 425 109 2,159 1,249,089 1,251,248 Commercial loans 2,070 567 619 3,256 386,265 389,521 Municipal loans — — — — 357,028 357,028 Loans to individuals 555 194 137 886 99,822 100,708 Total $ 6,843 $ 2,792 $ 1,351 $ 10,986 $ 3,449,157 $ 3,460,143 December 31, 2018 30-59 Days Past Due 60-89 Days Past Due Greater than 90 Days Past Due Total Past Due Current (1) Total Real estate loans: Construction $ 627 $ 307 $ — $ 934 $ 506,798 $ 507,732 1-4 family residential 7,441 1,258 1,335 10,034 784,465 794,499 Commercial 10,663 7,655 — 18,318 1,175,800 1,194,118 Commercial loans 1,946 705 591 3,242 353,407 356,649 Municipal loans — — — — 353,370 353,370 Loans to individuals 1,289 351 146 1,786 104,645 106,431 Total $ 21,966 $ 10,276 $ 2,072 $ 34,314 $ 3,278,485 $ 3,312,799 (1) Includes PCI loans measured at fair value at acquisition if the timing and amount of cash flows expected to be collected from those sales can be reasonably estimated. The following table sets forth average recorded investment and interest income recognized on impaired loans by class of loans for the periods presented (in thousands). The table excludes PCI loans measured at fair value at acquisition that have not experienced further deterioration in credit quality subsequent to the acquisition date: Three Months Ended June 30, 2019 June 30, 2018 Average Recorded Investment Interest Income Recognized Average Recorded Investment Interest Income Recognized Real estate loans: Construction $ 214 $ 5 $ 140 $ 1 1-4 family residential 7,533 130 3,955 47 Commercial 24,394 153 31,916 5 Commercial loans 2,753 38 2,024 19 Municipal loans 429 6 502 7 Loans to individuals 438 9 242 3 Total $ 35,761 $ 341 $ 38,779 $ 82 Six Months Ended June 30, 2019 June 30, 2018 Average Recorded Investment Interest Income Recognized Average Recorded Interest Income Recognized Real estate loans: Construction $ 200 $ 9 $ 114 $ 1 1-4 family residential 6,271 210 3,945 93 Commercial 30,917 440 20,595 9 Commercial loans 2,699 68 1,900 36 Municipal loans 429 12 502 14 Loans to individuals 517 20 221 4 Total $ 41,033 $ 759 $ 27,277 $ 157 Troubled Debt Restructurings The restructuring of a loan is considered a TDR if both (i) the borrower is experiencing financial difficulties and (ii) the creditor has granted a concession. Concessions may include interest rate reductions or below market interest rates, restructuring amortization schedules and other actions intended to minimize potential losses. We may provide a combination of concessions which may include an extension of the amortization period, interest rate reduction and/or converting the loan to interest-only for a limited period of time. The following tables set forth the recorded balance of loans considered to be TDRs that were restructured and the type of concession by class of loans during the periods presented (dollars in thousands): Three Months Ended June 30, 2019 Extend Amortization Period Interest Rate Reductions Combination Total Modifications Number of Loans Real estate loans: 1-4 family residential $ — $ — $ — $ — — Commercial — — 96 96 1 Commercial loans — — 485 485 4 Loans to individuals — — 25 25 3 Total $ — $ — $ 606 $ 606 8 Six Months Ended June 30, 2019 Extend Amortization Period Interest Rate Reductions Combination Total Modifications Number of Loans Real estate loans: 1-4 family residential $ — $ — $ 111 $ 111 1 Commercial 7,594 — 96 7,690 2 Commercial loans 56 — 485 541 5 Loans to individuals — — 39 39 5 Total $ 7,650 $ — $ 731 $ 8,381 13 Three Months Ended June 30, 2018 Extend Amortization Period Interest Rate Reductions Combination Total Modifications Number of Loans Real estate loans: 1-4 family residential $ — $ 80 $ — $ 80 1 Commercial loans — — 90 90 2 Loans to individuals 9 — 13 22 3 Total $ 9 $ 80 $ 103 $ 192 6 Six Months Ended June 30, 2018 Extend Amortization Period Interest Rate Reductions Combination Total Modifications Number of Loans Real estate loans: 1-4 family residential $ — $ 80 $ — $ 80 1 Commercial loans 132 — 90 222 5 Loans to individuals 106 — 13 119 4 Total $ 238 $ 80 $ 103 $ 421 10 The majority of loans restructured as TDRs during the six months ended June 30, 2019 and 2018 were modified with maturity extensions. Interest continues to be charged on principal balances outstanding during the extended term. Therefore, the financial effects of the recorded investment of loans restructured as TDRs during the six months ended June 30, 2019 and 2018 were not significant. Generally, the loans identified as TDRs were previously reported as impaired loans prior to restructuring, and therefore, the modification did not impact our determination of the allowance for loan losses. On an ongoing basis, the performance of the TDRs is monitored for subsequent payment default. Payment default for TDRs is recognized when the borrower is 90 days or more past due. For the three and six months ended June 30, 2019 and 2018 , the amount of TDRs in default was not significant. Payment defaults for TDRs did not significantly impact the determination of the allowance for loan losses in the periods presented. At June 30, 2019 and 2018 , there were no commitments to lend additional funds to borrowers whose terms had been modified in TDRs. Purchased Credit Impaired Loans The follo |
Borrowing Arrangements
Borrowing Arrangements | 6 Months Ended |
Jun. 30, 2019 | |
Debt Disclosure [Abstract] | |
Borrowing Arrangements | Borrowing Arrangements Information related to borrowings is provided in the table below (dollars in thousands): June 30, December 31, 2018 Other borrowings: Balance at end of period $ 26,064 $ 36,810 Average amount outstanding during the period (1) 15,653 10,880 Maximum amount outstanding during the period (2) 28,354 36,810 Weighted average interest rate during the period (3) 1.7 % 1.4 % Interest rate at end of period (4) 2.0 % 2.1 % Federal Home Loan Bank borrowings: Balance at end of period $ 823,757 $ 719,065 Average amount outstanding during the period (1) 785,901 720,785 Maximum amount outstanding during the period (2) 1,004,997 957,231 Weighted average interest rate during the period (3) 2.1 % 1.8 % Interest rate at end of period (4) 2.4 % 2.3 % (1) The average amount outstanding during the period was computed by dividing the total daily outstanding principal balances by the number of days in the period. (2) The maximum amount outstanding at any month-end during the period. (3) The weighted average interest rate during the period was computed by dividing the actual interest expense (annualized for interim periods) by the average amount outstanding during the period. The weighted average interest rate on the FHLB borrowings includes the effect of interest rate swaps. (4) Stated rate. Maturities of the obligations associated with our borrowing arrangements based on scheduled repayments at June 30, 2019 are as follows (in thousands): Payments Due by Period Less than 1 Year 1-2 Years 2-3 Years 3-4 Years 4-5 Years Thereafter Total Other borrowings $ 25,931 $ 133 $ — $ — $ — $ — $ 26,064 Federal Home Loan Bank borrowings 796,765 21,374 — — — 5,618 823,757 Total obligations $ 822,696 $ 21,507 $ — $ — $ — $ 5,618 $ 849,821 Other borrowings include federal funds purchased and repurchase agreements. Southside Bank has three unsecured lines of credit for the purchase of overnight federal funds at prevailing rates with Frost Bank, TIB – The Independent Bankers Bank and Comerica Bank for $40.0 million , $15.0 million and $7.5 million , respectively. There were $18.0 million and $28.0 million federal funds purchased at June 30, 2019 and December 31, 2018 , respectively. Southside Bank has a $5.0 million line of credit with Frost Bank to be used to issue letters of credit, and at June 30, 2019 , the line had no outstanding letters of credit. At June 30, 2019 , the amount of additional funding Southside Bank could obtain from FHLB, collateralized by securities, FHLB stock and nonspecified loans and securities, was approximately $1.26 billion , net of FHLB stock purchases required. Southside Bank currently has no outstanding letters of credit from FHLB held as collateral for its public fund deposits. Southside Bank enters into sales of securities under repurchase agreements. These repurchase agreements totaled $8.1 million and $8.8 million at June 30, 2019 and December 31, 2018 , respectively, and had maturities of less than thirteen months . These repurchase agreements are secured by investment securities and are stated at the amount of cash received in connection with the transaction. FHLB borrowings represent borrowings with fixed and floating interest rates ranging from 1.37% to 4.799% and with remaining maturities of 2 days to 9 years at June 30, 2019 . FHLB borrowings may be collateralized by FHLB stock, nonspecified loans and/or securities. Southside Bank has entered into various variable rate advance agreements with the FHLB. These advance agreements totaled $310.0 million at both June 30, 2019 and December 31, 2018 . Three of the variable rate advance agreements have interest rates tied to three-month LIBOR and the remaining agreements have interest rates tied to one-month LIBOR . In connection with $270.0 million of these variable rate advance agreements, Southside Bank also entered into various interest rate swap contracts that are treated as cash flow hedges under ASC Topic 815, “Derivatives and Hedging” that effectively convert the variable rate advance agreements to fixed interest rates. The interest rate swap contracts had an average interest rate of 1.58% with an average weighted maturity of 4.3 years at June 30, 2019 . Refer to “Note 10 - Derivative Financial Instruments and Hedging Activities” in our consolidated financial statements included in this report for a detailed description of our hedging policy and methodology related to derivative instruments. |
Long-term Debt Long-term Obliga
Long-term Debt Long-term Obligations | 6 Months Ended |
Jun. 30, 2019 | |
Debt Disclosure [Abstract] | |
Long-term Obligations | Long-term Debt June 30, December 31, (in thousands) Subordinated notes: (1) 5.50% Subordinated Notes, net of unamortized debt issuance costs (2) $ 98,490 $ 98,407 Total Subordinated notes 98,490 98,407 Trust preferred subordinated debentures: (3) Southside Statutory Trust III, net of unamortized debt issuance costs (4) 20,556 20,554 Southside Statutory Trust IV 23,196 23,196 Southside Statutory Trust V 12,887 12,887 Magnolia Trust Company I 3,609 3,609 Total Trust preferred subordinated debentures 60,248 60,246 Total Long-term debt $ 158,738 $ 158,653 (1) This debt consists of subordinated notes with a remaining maturity greater than one year that qualify under the risk-based capital guidelines as Tier 2 capital, subject to certain limitations. (2) The unamortized discount and debt issuance costs reflected in the carrying amount of the subordinated notes totaled approximately $1.5 million at June 30, 2019 and $1.6 million at December 31, 2018 . (3) This debt consists of trust preferred securities that qualify under the risk-based capital guidelines as Tier 1 capital, subject to certain limitations. (4) The unamortized debt issuance costs reflected in the carrying amount of the Southside Statutory Trust III junior subordinated debentures totaled $63,000 at June 30, 2019 and $65,000 at December 31, 2018 . As of June 30, 2019 , the details of the subordinated notes and the trust preferred subordinated debentures are summarized below (dollars in thousands): Date Issued Amount Issued Fixed or Floating Rate Interest Rate Maturity Date 5.50% Subordinated Notes September 19, 2016 $ 100,000 Fixed-to-Floating 5.50% September 30, 2026 Southside Statutory Trust III September 4, 2003 $ 20,619 Floating 3 month LIBOR + 2.94% September 4, 2033 Southside Statutory Trust IV August 8, 2007 $ 23,196 Floating 3 month LIBOR + 1.30% October 30, 2037 Southside Statutory Trust V August 10, 2007 $ 12,887 Floating 3 month LIBOR + 2.25% September 15, 2037 Magnolia Trust Company I (1) October 10, 2007 $ 3,609 Floating 3 month LIBOR + 1.80% November 23, 2035 (1) On October 10, 2007, as part of an acquisition we assumed $3.6 million of floating rate junior subordinated debentures issued in 2005 to Magnolia Trust Company I. On September 19, 2016 , the Company issued $100.0 million aggregate principal amount of fixed-to-floating rate subordinated notes that mature on September 30, 2026 . This debt initially bears interest at a fixed rate of 5.50% through September 29, 2021 and thereafter, adjusts quarterly at a floating rate equal to three-month LIBOR plus 429.7 basis points. |
Employee Benefit Plans
Employee Benefit Plans | 6 Months Ended |
Jun. 30, 2019 | |
Defined Contribution Plan [Abstract] | |
Employee Benefit Plans | Employee Benefit Plans The components of net periodic benefit cost (income) related to our employee benefit plans are as follows (in thousands): Three Months Ended June 30, Defined Benefit Defined Benefit Pension Plan Acquired Restoration 2019 2018 2019 2018 2019 2018 Service cost $ 394 $ 390 $ — $ — $ 110 $ 84 Interest cost 919 839 43 41 195 165 Expected return on assets (1,511 ) (1,622 ) (73 ) (72 ) — — Net loss amortization 470 372 — — 181 248 Prior service (credit) cost amortization (4 ) (4 ) — — 1 2 Net periodic benefit cost (income) $ 268 $ (25 ) $ (30 ) $ (31 ) $ 487 $ 499 Six Months Ended June 30, Defined Benefit Defined Benefit Pension Plan Acquired Restoration 2019 2018 2019 2018 2019 2018 Service cost $ 710 $ 774 $ — $ — $ 170 $ 147 Interest cost 1,827 1,696 84 82 356 298 Expected return on assets (3,015 ) (3,242 ) (146 ) (145 ) — — Net loss amortization 913 756 — — 280 339 Prior service (credit) cost amortization (7 ) (7 ) — — 3 3 Net periodic benefit cost (income) $ 428 $ (23 ) $ (62 ) $ (63 ) $ 809 $ 787 The service cost component is recorded on our consolidated income statements as salaries and employee benefits in noninterest expense while all other components other than service cost are recorded in other noninterest expense. |
Derivative Financial Instrument
Derivative Financial Instruments and Hedging Activities | 6 Months Ended |
Jun. 30, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Financial Instruments and Hedging Activities | Derivative Financial Instruments and Hedging Activities Our hedging policy allows the use of interest rate derivative instruments to manage our exposure to interest rate risk or hedge specified assets and liabilities. These instruments may include interest rate swaps and interest rate caps and floors. All derivative instruments are carried on the balance sheet at their estimated fair value and are recorded in other assets or other liabilities, as appropriate. Derivative instruments may be designated as cash flow hedges of variable rate assets or liabilities, cash flow hedges of forecasted transactions or fair value hedges of a recognized asset or liability or as non-hedging instruments. Gains and losses on derivative instruments designated as cash flow hedges are recorded in AOCI to the extent that they are effective. The amount recorded in other comprehensive income is reclassified to earnings in the same periods that the hedged cash flows impact earnings. The ineffective portion of changes in fair value is reported in current earnings. Gains and losses on derivative instruments designated as fair value hedges, as well as the change in fair value on the hedged item, are recorded in interest income in the consolidated statements of income. Gains and losses due to changes in fair value of the interest rate swap agreements completely offset changes in the fair value of the hedged portion of the hedged item. For derivative instruments not designated as hedging instruments, the gain or loss is recognized in current earnings during the period of change. We have entered into certain interest rate swap contracts on specific variable rate FHLB advance agreements. These interest rate swap contracts were designated as hedging instruments in cash flow hedges under ASC Topic 815. The objective of the interest rate swap contracts is to manage the expected future cash flows on $270.0 million of variable rate advance agreements with the FHLB. The cash flows from the swap are expected to be effective in hedging the variability in future cash flows attributable to fluctuations in the underlying LIBOR interest rate. During 2018, we entered into partial-term fair value hedges for certain of our fixed rate callable AFS municipal securities. These partial-term hedges of selected cash flows covering the time periods to the call dates of the hedged securities were expected to be effective in offsetting changes in the fair value of the hedged securities. Interest rate swaps designated as partial-term fair value hedges were utilized to mitigate the effect of changing interest rates on the hedged securities. The hedging strategy converted a portion of the fixed interest rates on the securities to LIBOR-based variable interest rates. During the first quarter of 2019, our fair value hedging relationships were ineffective due to the sale of the hedged items. As a result of the sale, the cumulative adjustments to the carrying amount was a fair value loss recognized in earnings and recorded in interest income. The remaining fair value loss from the date of the sale of the hedged items through March 31, 2019, was recognized in earnings and recorded in noninterest income. As of March 31, 2019, the interest rate swaps were considered non-hedging instruments and were subsequently terminated on April 12, 2019. In accordance with ASC Topic 815, if a hedging item is terminated prior to maturity for a cash settlement, the existing gain or loss within AOCI will continue to be reclassified into earnings during the period or periods in which the hedged forecasted transaction affects earnings unless it is probable that the forecasted transaction will not occur by the end of the originally specified time period. If the forecasted transaction is deemed probable to not occur, the derivative gain or loss reported in AOCI shall be reclassified into earnings immediately. During 2017, we terminated two interest rate swap contracts designated as cash flow hedges. At the time of termination, we determined the underlying hedged forecasted transactions were still probable of occurring. The existing gain in AOCI will be reclassified into earnings in the same periods the hedged forecasted transaction affects earnings. These transactions are reevaluated on a monthly basis to determine if the hedged forecasted transactions are still probable of occurring. If at a subsequent evaluation, it is determined that the transactions will not occur, any related gains or losses recorded in AOCI are immediately recognized in earnings. From time to time, we may enter into certain interest rate swaps, cap and floor contracts that are not designated as hedging instruments. These interest rate derivative contracts relate to transactions in which we enter into an interest rate swap, cap, or floor with a customer while concurrently entering into an offsetting interest rate swap, cap, or floor with a third-party financial institution. We agree to pay interest to the customer on a notional amount at a variable rate and receive interest from the customer on a similar notional amount at a fixed interest rate. At the same time, we agree to pay a third-party financial institution the same fixed interest rate on the same notional amount and receive the same variable interest rate on the same notional amount. These interest rate derivative contracts allow our customers to effectively convert a variable rate loan to a fixed rate loan. The changes in the fair value of the underlying derivative contracts primarily offset each other and do not significantly impact our results of operations. We recognized swap fee income associated with these derivative contracts immediately based upon the difference in the bid/ask spread of the underlying transactions with the customer and the third-party financial institution. The swap fee income is included in other noninterest income in our consolidated statements of income. At June 30, 2019 , net derivative liabilities included $7.4 million of cash collateral held by a counterparty to a master netting agreement. The notional amounts of the derivative instruments represent the contractual cash flows pertaining to the underlying agreements. These amounts are not exchanged and are not reflected in the consolidated balance sheets. The fair value of the interest rate swaps are presented at net in other assets and other liabilities when a right of offset exists, based on transactions with a single counterparty that are subject to a legally enforceable master netting agreement. The following tables present the notional and estimated fair value amount of derivative positions outstanding (in thousands): June 30, 2019 December 31, 2018 Estimated Fair Value Estimated Fair Value Notional (1) Asset Derivative Liability Derivative Notional (1) Asset Derivative Liability Derivative Derivatives designated as hedging instruments Interest rate contracts: Swaps-Cash flow Hedge-Financial institution counterparties $ 270,000 $ 2,334 $ 3,442 $ 270,000 $ 9,388 $ 457 Swaps-Fair Value Hedge-Financial institution counterparties — — — 21,100 — 657 Derivatives designated as non-hedging instruments Interest rate contracts: Swaps-Financial institution counterparties 110,699 16 6,614 93,967 1,119 1,087 Swaps-Customer counterparties 110,699 6,614 16 93,967 1,087 1,119 Gross derivatives 8,964 10,072 11,594 3,320 Offsetting derivative assets/liabilities (2,350 ) (2,350 ) (2,201 ) (2,201 ) Cash collateral received/posted — (7,420 ) (8,306 ) — Net derivatives included in the consolidated balance sheets (2) $ 6,614 $ 302 $ 1,087 $ 1,119 (1) Notional amounts, which represent the extent of involvement in the derivatives market, are used to determine the contractual cash flows required in accordance with the terms of the agreement. These amounts are typically not exchanged, significantly exceed amounts subject to credit or market risk and are not reflected in the consolidated balance sheets. (2) Net derivative assets are included in other assets and net derivative liabilities are included in other liabilities on the consolidated balance sheets. Included in the fair value of net derivative assets and net derivative liabilities are credit valuation adjustments reflecting counterparty credit risk and our credit risk. We had no credit exposure related to interest rate swaps with financial institutions and $6.6 million related to interest rate swaps with customers at June 30, 2019 . We had no credit exposure related to interest rate swaps with financial institutions and $1.1 million related to interest rate swaps with customers at December 31, 2018 . The credit risk associated with customer transactions is partially mitigated as these are generally secured by the non-cash collateral securing the underlying transaction being hedged. The summarized expected weighted average remaining maturity of the notional amount of interest rate swaps and the weighted average interest rates associated with the amounts expected to be received or paid on interest rate swap agreements are presented below (dollars in thousands). Variable rates received on pay fixed swaps are based on one-month or three-month LIBOR rates in effect at June 30, 2019 and December 31, 2018 : June 30, 2019 December 31, 2018 Weighted Average Weighted Average Notional Amount Remaining Maturity (in years) Receive Rate Pay Rate Notional Amount Remaining Maturity Receive Rate Pay Swaps-Cash flow hedge Financial institution counterparties $ 270,000 4.3 2.44 % 1.58 % $ 270,000 4.8 2.45 % 1.58 % Swaps-Fair value hedge Financial institution counterparties — — — — 21,100 7.5 2.56 3.00 Swaps-Non-hedging Financial institution counterparties 110,699 11.6 2.42 2.57 93,967 11.6 2.36 2.58 Customer counterparties 110,699 11.6 2.57 2.42 93,967 11.6 2.58 2.36 |
Fair Value Measurement
Fair Value Measurement | 6 Months Ended |
Jun. 30, 2019 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurement | Fair Value Measurement Fair value is the price that would be received upon the sale of an asset or paid to transfer a liability (exit price) in an orderly transaction between market participants. A fair value measurement assumes that the transaction to sell the asset or transfer the liability occurs in the principal market for the asset or liability or, in the absence of a principal market, the most advantageous market for the asset or liability. The price in the principal (or most advantageous) market used to measure the fair value of the asset or liability is not adjusted for transaction costs. An orderly transaction is a transaction that assumes exposure to the market for a period prior to the measurement date to allow for marketing activities that are usual and customary for transactions involving such assets and liabilities; it is not a forced transaction. Market participants are buyers and sellers in the principal market that are (i) independent, (ii) knowledgeable, (iii) able to transact and (iv) willing to transact. Valuation techniques including the market approach, the income approach and/or the cost approach are utilized to determine fair value. Inputs to valuation techniques refer to the assumptions that market participants would use in pricing the asset or liability. Valuation policies and procedures are determined by our investment department and reported to our Asset/Liability Committee (“ALCO”) for review. An entity must consider all aspects of nonperforming risk, including the entity’s own credit standing, when measuring fair value of a liability. Inputs may be observable, meaning those that reflect the assumptions market participants would use in pricing the asset or liability developed based on market data obtained from independent sources, or unobservable, meaning those that reflect the reporting entity’s own assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. A fair value hierarchy for valuation inputs gives the highest priority to quoted prices in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The fair value hierarchy is as follows: Level 1 Inputs - Unadjusted quoted prices in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date. Level 2 Inputs - Inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. These might include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability (such as interest rates, volatilities, prepayment speeds, credit risks, etc.) or inputs that are derived principally from or corroborated by market data by correlation or other means. Level 3 Inputs - Unobservable inputs for determining the fair values of assets or liabilities that reflect an entity’s own assumptions about the assumptions that market participants would use in pricing the assets or liabilities. Level 3 assets recorded at fair value on a nonrecurring basis at June 30, 2019 and December 31, 2018 included loans for which a specific allowance was established based on the fair value of collateral and commercial real estate for which fair value of the properties was less than the cost basis. For both asset classes, the unobservable inputs were the additional adjustments applied by management to the appraised values to reflect such factors as non-current appraisals and revisions to estimated time to sell. These adjustments are determined based on qualitative judgments made by management on a case-by-case basis and are not quantifiable inputs, although they are used in the determination of fair value. A description of the valuation methodologies used for assets and liabilities measured at fair value, as well as the general classification of such instruments pursuant to the valuation hierarchy, is set forth below. Certain financial assets are measured at fair value in accordance with GAAP. Adjustments to the fair value of these assets usually result from the application of fair value accounting or write-downs of individual assets. Transfers between levels of the fair value hierarchy are recognized on the actual date of the event or circumstances that caused the transfer, which generally coincides with our monthly and/or quarterly valuation process. There were no transfers between Level 1 and Level 2 during the six months ended June 30, 2019 or the year ended December 31, 2018 . Securities Available for Sale and Equity Investments with readily determinable fair values – U.S. Treasury securities and equity investments with readily determinable fair values are reported at fair value utilizing Level 1 inputs. Other securities classified as available for sale are reported at fair value utilizing Level 2 inputs. For these securities, we obtain fair value measurements from independent pricing services and obtain an understanding of the pricing methodologies used by these independent pricing services. The fair value measurements consider observable data that may include dealer quotes, market spreads, cash flows, the U.S. Treasury yield curve, live trading levels, trade execution data, market consensus prepayment speeds, credit information and the bond’s terms and conditions, among other things, as stated in the pricing methodologies of the independent pricing services. We review and validate the prices supplied by the independent pricing services for reasonableness by comparison to prices obtained from, in most cases, two additional third party sources. For securities where prices are outside a reasonable range, we further review those securities, based on internal ALCO approved procedures, to determine what a reasonable fair value measurement is for those securities, given available data. Derivatives – Derivatives are reported at fair value utilizing Level 2 inputs. We obtain fair value measurements from three sources including an independent pricing service and the counterparty to the derivatives designated as hedges. The fair value measurements consider observable data that may include dealer quotes, market spreads, the U.S. Treasury yield curve, live trading levels, trade execution data, credit information and the derivatives’ terms and conditions, among other things. We review the prices supplied by the sources for reasonableness. In addition, we obtain a basic understanding of their underlying pricing methodology. We validate prices supplied by the sources by comparison to one another. Certain nonfinancial assets and nonfinancial liabilities measured at fair value on a recurring basis include reporting units measured at fair value and tested for goodwill impairment. Certain financial assets and financial liabilities are measured at fair value on a nonrecurring basis, which means that the instruments are not measured at fair value on an ongoing basis but are subject to fair value adjustments in certain circumstances (for example, when there is evidence of impairment). Financial assets and financial liabilities measured at fair value on a nonrecurring basis included foreclosed assets and impaired loans at June 30, 2019 and December 31, 2018 . Foreclosed Assets – Foreclosed assets are initially recorded at fair value less costs to sell. The fair value measurements of foreclosed assets can include Level 2 measurement inputs such as real estate appraisals and comparable real estate sales information, in conjunction with Level 3 measurement inputs such as cash flow projections, qualitative adjustments and sales cost estimates. As a result, the categorization of foreclosed assets is Level 3 of the fair value hierarchy. In connection with the measurement and initial recognition of certain foreclosed assets, we may recognize charge-offs through the allowance for loan losses. Impaired Loans – Certain impaired loans may be reported at the fair value of the underlying collateral if repayment is expected solely from the collateral. Collateral values are estimated using Level 3 inputs based on customized discounting criteria or appraisals. At June 30, 2019 and December 31, 2018 , the impact of loans with specific reserves based on the fair value of the collateral was reflected in our allowance for loan losses. The following tables summarize assets measured at fair value on a recurring and nonrecurring basis segregated by the level of the valuation inputs within the fair value hierarchy utilized to measure fair value (in thousands): June 30, 2019 Fair Value Measurements at the End of the Reporting Period Using Carrying Amount Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Recurring fair value measurements Investment securities: State and political subdivisions $ 528,855 $ — $ 528,855 $ — Other stocks and bonds 2,959 — 2,959 — Mortgage-backed securities: (1) Residential 1,318,986 — 1,318,986 — Commercial 237,987 — 237,987 — Equity investments: Equity investments 5,948 5,948 — — Derivative assets: Interest rate swaps 8,964 — 8,964 — Total asset recurring fair value measurements $ 2,103,699 $ 5,948 $ 2,097,751 $ — Derivative liabilities: Interest rate swaps $ 10,072 $ — $ 10,072 $ — Total liability recurring fair value measurements $ 10,072 $ — $ 10,072 $ — Nonrecurring fair value measurements Foreclosed assets $ 1,069 $ — $ — $ 1,069 Impaired loans (2) 32,148 — — 32,148 Total asset nonrecurring fair value measurements $ 33,217 $ — $ — $ 33,217 December 31, 2018 Fair Value Measurements at the End of the Reporting Period Using Carrying Amount Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Recurring fair value measurements Investment securities: State and political subdivisions $ 716,601 $ — $ 716,601 $ — Other stocks and bonds 2,709 — 2,709 — Mortgage-backed securities: (1) Residential 732,972 — 732,972 — Commercial 537,154 — 537,154 — Equity investments: Equity investments 5,791 5,791 — — Derivative assets: Interest rate swaps 11,594 — 11,594 — Total asset recurring fair value measurements $ 2,006,821 $ 5,791 $ 2,001,030 $ — Derivative liabilities: Interest rate swaps $ 3,320 $ — $ 3,320 $ — Total liability recurring fair value measurements $ 3,320 $ — $ 3,320 $ — Nonrecurring fair value measurements Foreclosed assets $ 1,206 $ — $ — $ 1,206 Impaired loans (2) 37,813 — — 37,813 Total asset nonrecurring fair value measurements $ 39,019 $ — $ — $ 39,019 (1) All mortgage-backed securities are issued and/or guaranteed by U.S. government agencies or U.S. government-sponsored enterprises. (2) Impaired loans represent collateral-dependent loans with a specific valuation allowance. Losses on these loans represent charge-offs which are netted against the allowance for loan losses. Disclosure of fair value information about financial instruments, whether or not recognized in the balance sheet, is required when it is practicable to estimate that value. In cases where quoted market prices are not available, fair values are based on estimates using present value or other estimation techniques. Those techniques are significantly affected by the assumptions used, including the discount rate and estimates of future cash flows. Such techniques and assumptions, as they apply to individual categories of our financial instruments, are as follows: Cash and cash equivalents - The carrying amount for cash and cash equivalents is a reasonable estimate of those assets’ fair value. Investment and mortgage-backed securities held to maturity - Fair values for these securities are based on quoted market prices, where available. If quoted market prices are not available, fair values are based on quoted market prices for similar securities or estimates from independent pricing services. FHLB stock - The carrying amount of FHLB stock is a reasonable estimate of the fair value of those assets. Equity investments - The carrying value of equity investments without readily determinable fair values are measured at cost less impairment, if any, adjusted for observable price changes for an identical or similar investment of the same issuer. This carrying value is a reasonable estimate of the fair value of those assets. Loans receivable - We estimate the fair value of our loan portfolio to an exit price notion with adjustments for liquidity, credit and prepayment factors. Nonperforming loans are estimated using discounted cash flow analyses or the underlying value of the collateral where applicable. Loans held for sale – The fair value of loans held for sale is determined based on expected proceeds, which are based on sales contracts and commitments. Deposit liabilities - The fair value of demand deposits, savings accounts and certain money market deposits is the amount on demand at the reporting date, which is the carrying value. Fair values for fixed rate CDs are estimated using a discounted cash flow calculation that applies interest rates currently being offered for deposits of similar remaining maturities. Other borrowings - Federal funds purchased generally have original terms to maturity of one day and repurchase agreements generally have terms of less than one year, and therefore both are considered short-term borrowings. Consequently, their carrying value is a reasonable estimate of fair value. FHLB borrowings - The fair value of these borrowings is estimated by discounting the future cash flows using rates at which borrowings would be made to borrowers with similar credit ratings and for the same remaining maturities. Subordinated notes - The fair value of the subordinated notes is estimated by discounting future cash flows using estimated rates at which long-term debt would be made to borrowers with similar credit ratings and for the remaining maturities. Trust preferred subordinated debentures - The fair value of the long-term debt is estimated by discounting future cash flows using estimated rates at which long-term debt would be made to borrowers with similar credit ratings and for the remaining maturities. The fair value estimate of financial instruments for which quoted market prices are unavailable is dependent upon the assumptions used. Consequently, those estimates cannot be substantiated by comparison to independent markets and, in many cases, could not be realized in immediate settlement of the instruments. Accordingly, the aggregate fair value amounts presented in the following fair value tables do not necessarily represent their underlying value. The following tables present our financial assets and financial liabilities measured on a nonrecurring basis at both their respective carrying amounts and estimated fair value (in thousands): Estimated Fair Value June 30, 2019 Carrying Total Level 1 Level 2 Level 3 Financial assets: Cash and cash equivalents $ 132,521 $ 132,521 $ 132,521 $ — $ — Investment securities: Held to maturity, at carrying value 3,018 3,054 — 3,054 — Mortgage-backed securities: Held to maturity, at carrying value 144,073 148,253 — 148,253 — Federal Home Loan Bank stock, at cost 44,718 44,718 — 44,718 — Equity investments 6,426 6,426 — 6,426 — Loans, net of allowance for loan losses 3,435,438 3,493,559 — — 3,493,559 Loans held for sale 1,812 1,812 — 1,812 — Financial liabilities: Deposits $ 4,479,256 $ 4,478,936 $ — $ 4,478,936 $ — Other borrowings 26,064 26,064 — 26,064 — Federal Home Loan Bank borrowings 823,757 825,450 — 825,450 — Subordinated notes, net of unamortized debt issuance costs 98,490 98,964 — 98,964 — Trust preferred subordinated debentures, net of unamortized debt issuance costs 60,248 58,819 — 58,819 — Estimated Fair Value December 31, 2018 Carrying Total Level 1 Level 2 Level 3 Financial assets: Cash and cash equivalents $ 120,719 $ 120,719 $ 120,719 $ — $ — Investment securities: Held to maturity, at carrying value 3,083 3,046 — 3,046 — Mortgage-backed securities: Held to maturity, at carrying value 159,848 156,735 — 156,735 — Federal Home Loan Bank stock, at cost 32,583 32,583 — 32,583 — Equity investments 6,302 6,302 — 6,302 — Loans, net of allowance for loan losses 3,285,780 3,251,923 — — 3,251,923 Loans held for sale 601 601 — 601 — Financial liabilities: Deposits $ 4,425,030 $ 4,417,902 $ — $ 4,417,902 $ — Other borrowings 36,810 36,810 — 36,810 — Federal Home Loan Bank borrowings 719,065 708,904 — 708,904 — Subordinated notes, net of unamortized debt issuance costs 98,407 97,611 — 97,611 — Trust preferred subordinated debentures, net of unamortized debt issuance costs 60,246 54,729 — 54,729 — |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The income tax expense included in the accompanying consolidated statements of income consists of the following (in thousands): Three Months Ended Six Months Ended 2019 2018 2019 2018 Current income tax expense $ 3,553 $ 667 $ 6,564 $ 3,012 Deferred income tax expense 16 2,693 142 2,438 Income tax expense $ 3,569 $ 3,360 $ 6,706 $ 5,450 The net deferred tax liability totaled $5.0 million at June 30, 2019 as compared to a net deferred asset of $9.8 million at December 31, 2018 . No valuation allowance was recorded at June 30, 2019 or December 31, 2018 , as management believes it is more likely than not that all of the deferred tax asset items will be realized in future years. Unrecognized tax benefits were not material at June 30, 2019 or December 31, 2018 . We recognized income tax expense of $3.6 million and $6.7 million , for an effective tax rate (“ETR”) of 16.1% and 15.2% for the three and six months ended June 30, 2019 , respectively, compared to income tax expense of $3.4 million and $5.5 million , for an ETR of 14.3% and 13.0% , for the three and six months ended June 30, 2018 , respectively. The higher ETR for the three and six months ended June 30, 2019 was mainly due to a decrease in tax-exempt income as a percentage of pre-tax income as compared to the same periods in 2018. The ETR differs from the stated rate of 21% for the three and six months ended June 30, 2019 and 2018 primarily due to the effect of tax-exempt income from municipal loans and securities, as well as bank owned life insurance. We file income tax returns in the U.S. federal jurisdictions and in certain states. We are no longer subject to U.S. federal income tax examinations by tax authorities for years before 2015 or Texas state tax examinations by tax authorities for years before 2014 |
Leases
Leases | 6 Months Ended |
Jun. 30, 2019 | |
Leases [Abstract] | |
Leases | Leases We lease certain retail- and full-service branch locations, ATM locations, certain equipment and a loan production office . Leases with an initial term of twelve months or less are not recorded on the balance sheet. Operating lease cost, which is comprised of the amortization of the ROU asset and the implicit interest accreted on the operating lease liability, is recognized on a straight-line basis over the lease term and is included in net occupancy expense on our consolidated statements of income. We evaluate the lease term by assuming the exercise of options to extend that are reasonably assured and those option periods covered by an option to terminate the lease, if deemed not reasonably certain to be exercised. The lease term is used to determine the straight-line expense and limits the depreciable life of any related leasehold improvements. Certain leases require us to pay real estate taxes, insurance, maintenance and other operating expenses associated with the leased premises. These expenses are classified in net occupancy expense on our consolidated statements of income, consistent with similar costs for owned locations, but is not included in operating lease cost below. Our leases have remaining lease terms ranging from 4 months to 19.9 years , some of which include options to extend the leases for up to 10 years , and some of which include options to terminate the leases within 2 years . We calculate the lease liability using a discount rate that represents our incremental borrowing rate at the lease commencement date. We are also party to operating leases where we lease properties we own to third parties. Operating lease income received from tenants who rent our properties is reported as a reduction to occupancy expense on our consolidated statements of income. The underlying assets associated with these operating leases are included in premises and equipment on our consolidated balance sheets. Balance sheet information related to leases was as follows (in thousands): June 30, 2019 Operating leases: Operating lease right-of-use assets $ 9,812 Operating lease liabilities $ 10,204 The components of lease cost were as follows (in thousands): Three Months Ended June 30, 2019 Six Months Ended June 30, 2019 Operating lease cost $ 395 $ 789 Supplemental cash flow information related to leases was as follows (in thousands): Three Months Ended June 30, 2019 Six Months Ended June 30, 2019 Cash paid for amounts included in the measurement of the lease liabilities: Operating cash flows from operating leases $ 360 $ 700 Right-of-use assets obtained in exchange for new operating lease liabilities $ 654 $ 654 Additional information related to leases was as follows: June 30, 2019 Weighted average remaining lease term (in years) 12.5 Weighted average discount rate 3.88 % Future minimum rental commitments due under non-cancelable operating leases at June 30, 2019 were as follows (in thousands): Year ending December 31, 2019 (excluding the six months ended June 30, 2019) $ 625 2020 1,338 2021 1,232 2022 1,193 2023 1,044 2024 and thereafter 7,866 Total lease payments (1) 13,298 Less: Interest (3,094 ) Present value of lease liabilities $ 10,204 (1) Excludes $9.1 million of lease payments for a lease executed but not yet commenced. Lease will commence in 2020 with a lease term of 20.4 years . We also lease certain of our owned facilities or portions thereof to third parties. Our primary leased facility is a 202,000 square-foot office building in Fort Worth, Texas that is used for a branch location and certain bank operations. We occupy approximately 41,000 square feet of the building and lease the remaining space to various tenants. Some of these leases contain options to renew and options to terminate at the discretion of the tenant. Gross rental income from these leases were as follows (in thousands): Three Months Ended June 30, 2019 Six Months Ended June 30, 2019 Gross rental income $ 742 $ 1,487 At June 30, 2019 , non-cancelable operating leases with future minimum lease payments are as follows (in thousands): Year ending December 31, 2019 (excluding the six months ended June 30, 2019) $ 1,388 2020 2,693 2021 1,576 2022 1,553 2023 1,316 2024 and thereafter 4,098 Total lease payments $ 12,624 |
Leases | Leases We lease certain retail- and full-service branch locations, ATM locations, certain equipment and a loan production office . Leases with an initial term of twelve months or less are not recorded on the balance sheet. Operating lease cost, which is comprised of the amortization of the ROU asset and the implicit interest accreted on the operating lease liability, is recognized on a straight-line basis over the lease term and is included in net occupancy expense on our consolidated statements of income. We evaluate the lease term by assuming the exercise of options to extend that are reasonably assured and those option periods covered by an option to terminate the lease, if deemed not reasonably certain to be exercised. The lease term is used to determine the straight-line expense and limits the depreciable life of any related leasehold improvements. Certain leases require us to pay real estate taxes, insurance, maintenance and other operating expenses associated with the leased premises. These expenses are classified in net occupancy expense on our consolidated statements of income, consistent with similar costs for owned locations, but is not included in operating lease cost below. Our leases have remaining lease terms ranging from 4 months to 19.9 years , some of which include options to extend the leases for up to 10 years , and some of which include options to terminate the leases within 2 years . We calculate the lease liability using a discount rate that represents our incremental borrowing rate at the lease commencement date. We are also party to operating leases where we lease properties we own to third parties. Operating lease income received from tenants who rent our properties is reported as a reduction to occupancy expense on our consolidated statements of income. The underlying assets associated with these operating leases are included in premises and equipment on our consolidated balance sheets. Balance sheet information related to leases was as follows (in thousands): June 30, 2019 Operating leases: Operating lease right-of-use assets $ 9,812 Operating lease liabilities $ 10,204 The components of lease cost were as follows (in thousands): Three Months Ended June 30, 2019 Six Months Ended June 30, 2019 Operating lease cost $ 395 $ 789 Supplemental cash flow information related to leases was as follows (in thousands): Three Months Ended June 30, 2019 Six Months Ended June 30, 2019 Cash paid for amounts included in the measurement of the lease liabilities: Operating cash flows from operating leases $ 360 $ 700 Right-of-use assets obtained in exchange for new operating lease liabilities $ 654 $ 654 Additional information related to leases was as follows: June 30, 2019 Weighted average remaining lease term (in years) 12.5 Weighted average discount rate 3.88 % Future minimum rental commitments due under non-cancelable operating leases at June 30, 2019 were as follows (in thousands): Year ending December 31, 2019 (excluding the six months ended June 30, 2019) $ 625 2020 1,338 2021 1,232 2022 1,193 2023 1,044 2024 and thereafter 7,866 Total lease payments (1) 13,298 Less: Interest (3,094 ) Present value of lease liabilities $ 10,204 (1) Excludes $9.1 million of lease payments for a lease executed but not yet commenced. Lease will commence in 2020 with a lease term of 20.4 years . We also lease certain of our owned facilities or portions thereof to third parties. Our primary leased facility is a 202,000 square-foot office building in Fort Worth, Texas that is used for a branch location and certain bank operations. We occupy approximately 41,000 square feet of the building and lease the remaining space to various tenants. Some of these leases contain options to renew and options to terminate at the discretion of the tenant. Gross rental income from these leases were as follows (in thousands): Three Months Ended June 30, 2019 Six Months Ended June 30, 2019 Gross rental income $ 742 $ 1,487 At June 30, 2019 , non-cancelable operating leases with future minimum lease payments are as follows (in thousands): Year ending December 31, 2019 (excluding the six months ended June 30, 2019) $ 1,388 2020 2,693 2021 1,576 2022 1,553 2023 1,316 2024 and thereafter 4,098 Total lease payments $ 12,624 |
Off-Balance-Sheet Arrangements,
Off-Balance-Sheet Arrangements, Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Off-Balance-Sheet Arrangements, Commitments and Contingencies | Off-Balance-Sheet Arrangements, Commitments and Contingencies Financial Instruments with Off-Balance-Sheet Risk . In the normal course of business, we are a party to certain financial instruments with off-balance-sheet risk to meet the financing needs of our customers. These off-balance-sheet instruments include commitments to extend credit and standby letters of credit. These instruments involve, to varying degrees, elements of credit and interest rate risk in excess of the amount reflected in the financial statements. The contract or notional amounts of these instruments reflect the extent of involvement and exposure to credit loss that we have in these particular classes of financial instruments. Commitments to extend credit are agreements to lend to a customer provided that the terms established in the contract are met. Commitments generally have fixed expiration dates and may require the payment of fees. Since some commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. Standby letters of credit are conditional commitments issued to guarantee the performance of a customer to a third party. These guarantees are primarily issued to support public and private borrowing arrangements. The credit risk involved in issuing letters of credit is essentially the same as that involved in extending loan commitments to customers and similarly do not necessarily represent future cash obligations. Financial instruments with off-balance-sheet risk were as follows (in thousands): June 30, 2019 December 31, 2018 Unused commitments: Commitments to extend credit $ 1,024,034 $ 874,557 Standby letters of credit 27,463 27,438 Total $ 1,051,497 $ 901,995 We apply the same credit policies in making commitments and standby letters of credit as we do for on-balance-sheet instruments. We evaluate each customer’s creditworthiness on a case-by-case basis. The amount of collateral obtained, if deemed necessary, upon extension of credit is based on management’s credit evaluation of the borrower. Collateral held varies but may include cash or cash equivalents, negotiable instruments, real estate, accounts receivable, inventory, oil, gas and mineral interests, property, plant and equipment. Securities . In the normal course of business we buy and sell securities. At June 30, 2019 , there were $38.6 million of unsettled trades to purchase securities and no unsettled trades to sell securities. At December 31, 2018 , there were $6.4 million unsettled trades to purchase securities and no unsettled trades to sell securities. Deposits . There were no unsettled issuances of brokered certificates of deposits (“CD”) at June 30, 2019 . There were $15.2 million unsettled issuances of brokered CDs at December 31, 2018 . Litigation . We are involved with various litigation in the normal course of business. Management, after consulting with our legal counsel, believes that any liability resulting from litigation will not have a material effect on our financial position, results of operations or liquidity. |
Summary of Significant Accoun_2
Summary of Significant Accounting and Reporting Policies (Policies) | 6 Months Ended |
Jun. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation In this report, the words “the Company,” “we,” “us,” and “our” refer to the combined entities of Southside Bancshares, Inc. and its subsidiaries, including Southside Bank. The words “Southside” and “Southside Bancshares” refer to Southside Bancshares, Inc. The words “Southside Bank” and “the Bank” refer to Southside Bank. “Diboll” refers to Diboll State Bancshares, Inc., a bank holding company and its wholly-owned subsidiary, First Bank & Trust East Texas, acquired by Southside on November 30, 2017. The accompanying unaudited consolidated financial statements have been prepared in accordance with United States (“U.S.”) generally accepted accounting principles (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, not all information required by GAAP for complete financial statements is included in these interim statements. In the opinion of management, all adjustments necessary for a fair presentation of such financial statements have been included. Such adjustments consisted only of normal recurring items. The preparation of these consolidated financial statements in accordance with GAAP requires the use of management’s estimates. These estimates are subjective in nature and involve matters of judgment. Actual amounts could differ from these estimates. Interim results are not necessarily indicative of results for a full year. These financial statements should be read in conjunction with the financial statements and notes thereto in our Annual Report on Form 10-K for the year ended December 31, 2018 . Accounting Changes and Reclassifications Certain prior period amounts may be reclassified to conform to current year presentation. Debt Securities We adopted Accounting Standards Update (“ASU”) 2017-08, “Receivables - Nonrefundable Fees and Other Costs (Subtopic 310-20): Premium Amortization on Purchased Callable Debt Securities,” on January 1, 2019, the effective date of the guidance. Under previous GAAP, premiums on callable debt securities were generally amortized over the contractual life of the security. ASU 2017-08 requires the premium on callable debt securities to be amortized to the earliest call date. If the debt security is not called at the earliest call date, the holder of the debt security would be required to reset the effective yield on the debt security based on the payment terms required by the debt security. The guidance requires companies to apply the requirements on a modified retrospective basis through a cumulative-effect adjustment directly to retained earnings as of the beginning of the period of adoption. Adoption of this guidance on January 1, 2019, resulted in a cumulative-effect adjustment to reduce retained earnings by $16.5 million , before tax. Subsequent to January 1, 2019, we sold the majority of the securities impacted by ASU 2017-08, and thus, the standard did not materially impact our consolidated net income. |
Leases | Leases We evaluate our contracts at inception to determine if an arrangement is or contains a lease. Operating leases are included in operating lease right-of-use (“ROU”) assets and operating lease liabilities in our consolidated balance sheets. The Company has no finance leases. ROU assets represent our right to use an underlying asset for the lease term, and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. Our leases do not provide an implicit rate, so we use our incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The incremental borrowing rate is reevaluated upon lease modification. The operating lease ROU asset also includes any initial direct costs and prepaid lease payments made less any lease incentives. Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. We adopted ASU 2016-02, “Leases (Topic 842),” on January 1, 2019, the effective date of the guidance, using the practical expedient transition method whereby we did not revise comparative period information or disclosure. The new standard requires lessees to record assets and liabilities on the balance sheet for all leases with terms longer than 12 months. We elected the package of practical expedients permitted under the transition guidance within the new standard, which among other things, allows us to carryforward the historical lease classification. We also elected certain optional practical expedients including the hindsight practical expedient under which we considered the actual outcomes of lease renewals and terminations when measuring the lease term at adoption, and we made an accounting policy election to keep leases with an initial term of 12 months or less off of the balance sheet. We recognize these lease payments in the consolidated statements of income on a straight-line basis over the lease term. We have lease agreements with lease and non-lease components, and we have elected the practical expedient to account for these as a single lease component. Our operating leases relate primarily to bank branches and office space. In conjunction with the adoption of ASU 2016-02 on January 1, 2019, we recognized operating lease liabilities of $10.1 million and related lease assets of $9.8 million on our balance sheet. The difference between the lease assets and lease liabilities primarily consists of deferred rent liabilities reclassified upon adoption to reduce the measurement of the lease assets. The standard did not materially impact our consolidated net income and had no impact on cash flows. |
Accounting Pronouncements | Accounting Pronouncements In June 2016, the FASB issued ASU 2016-13, “Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” (“CECL”). ASU 2016-13 introduces an approach based on expected losses to estimate credit losses on certain types of financial instruments. ASU 2016-13 also modifies the impairment model for AFS debt securities and provides for a simplified accounting model for purchased financial assets with credit deterioration since their origination. ASU 2016-13 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. Early adoption is permitted for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. The guidance requires companies to apply the requirements in the year of adoption through a cumulative-effect adjustment with some aspects of the update requiring a prospective transition approach. We are currently evaluating the potential impact of the pending adoption of ASU 2016-13 on our consolidated financial statements. We plan to adopt ASU 2016-13 on January 1, 2020, the effective date. We have developed a project plan, assigned a project team to complete the analysis needed to implement the guidance and engaged a third party vendor solution to assist with the application of ASU 2016-13. During the second quarter of 2019, the project team entered the parallel phase of the project during which the team will run parallel models to evaluate system processes, data generation and refine aspects of the transition to CECL. In January 2017, the FASB issued ASU 2017-04, “Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment.” ASU 2017-04 is intended to simplify goodwill impairment testing by eliminating the second step of the analysis which requires the calculation of the implied fair value of goodwill to measure a goodwill impairment charge. The update requires entities to compare the fair value of a reporting unit with its carrying amount and recognize an impairment charge for any amount by which the carrying amount exceeds the reporting unit’s fair value, to the extent that the loss recognized does not exceed the amount of goodwill allocated to that reporting unit. ASU 2017-04 is effective for annual and interim goodwill impairment tests performed in periods beginning after December 15, 2019. Early adoption is permitted for annual and interim goodwill impairment testing dates after January 1, 2017. The guidance requires companies to apply the requirements prospectively in the year of adoption. ASU 2017-04 is not expected to have a material impact on our consolidated financial statements. |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Earnings Per Share [Abstract] | |
Earnings per share on a basic and diluted basis | Earnings per share on a basic and diluted basis are calculated as follows (in thousands, except per share amounts): Three Months Ended Six Months Ended 2019 2018 2019 2018 Basic and Diluted Earnings: Net income $ 18,610 $ 20,203 $ 37,427 $ 36,454 Basic weighted-average shares outstanding 33,726 35,062 33,711 35,042 Add: Stock awards 150 171 151 175 Diluted weighted-average shares outstanding 33,876 35,233 33,862 35,217 Basic earnings per share: Net Income $ 0.55 $ 0.58 $ 1.11 $ 1.04 Diluted earnings per share: Net Income $ 0.55 $ 0.57 $ 1.11 $ 1.04 |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Income (Loss) (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Schedule of accumulated other comprehensive income (loss) by component | The changes in accumulated other comprehensive income (loss) by component are as follows (in thousands): Three Months Ended June 30, 2019 Pension Plans Unrealized Gains (Losses) on Securities Unrealized Gains (Losses) on Derivatives Net Prior Service (Cost) Credit Net Gain (Loss) Total Beginning balance, net of tax $ 5,901 $ 4,153 $ (140 ) $ (25,687 ) $ (15,773 ) Other comprehensive income (loss): Other comprehensive income (loss) before reclassifications 32,196 (5,653 ) — — 26,543 Reclassification adjustments included in net income (336 ) (642 ) (3 ) 651 (330 ) Income tax (expense) benefit (6,691 ) 1,322 1 (137 ) (5,505 ) Net current-period other comprehensive income (loss), net of tax 25,169 (4,973 ) (2 ) 514 20,708 Ending balance, net of tax $ 31,070 $ (820 ) $ (142 ) $ (25,173 ) $ 4,935 Six Months Ended June 30, 2019 Pension Plans Unrealized Gains (Losses) on Securities Unrealized Gains (Losses) on Derivatives Net Prior Net Gain (Loss) Total Beginning balance, net of tax $ (31,120 ) $ 7,146 $ (139 ) $ (26,115 ) $ (50,228 ) Other comprehensive income (loss): Other comprehensive income (loss) before reclassifications 78,822 (8,773 ) — — 70,049 Reclassification adjustments included in net income (101 ) (1,310 ) (4 ) 1,193 (222 ) Income tax (expense) benefit (16,531 ) 2,117 1 (251 ) (14,664 ) Net current-period other comprehensive income (loss), net of tax 62,190 (7,966 ) (3 ) 942 55,163 Ending balance, net of tax $ 31,070 $ (820 ) $ (142 ) $ (25,173 ) $ 4,935 Three Months Ended June 30, 2018 Pension Plans Unrealized Gains (Losses) on Securities Unrealized Gains (Losses) on Derivatives Net Prior Service (Cost) Credit Net Gain (Loss) Total Beginning balance, net of tax $ (35,594 ) $ 9,652 $ (134 ) $ (25,894 ) $ (51,970 ) Other comprehensive income (loss): Other comprehensive (loss) income before reclassifications (10,371 ) 1,725 — — (8,646 ) Reclassification adjustments included in net income 1,584 (331 ) (2 ) 620 1,871 Income tax benefit (expense) 1,845 (293 ) 1 (130 ) 1,423 Net current-period other comprehensive (loss) income, net of tax (6,942 ) 1,101 (1 ) 490 (5,352 ) Ending balance, net of tax $ (42,536 ) $ 10,753 $ (135 ) $ (25,404 ) $ (57,322 ) Six Months Ended June 30, 2018 Pension Plans Unrealized Gains (Losses) on Securities Unrealized Gains (Losses) on Derivatives Net Prior Service (Cost) Credit Net Gain (Loss) Total Beginning balance, net of tax $ (16,295 ) $ 6,399 $ (133 ) $ (26,269 ) $ (36,298 ) Cumulative effect of ASU 2016-01 (1) 85 — — — 85 Adjusted beginning balance, net of tax (16,210 ) 6,399 (133 ) (26,269 ) (36,213 ) Other comprehensive income (loss): Other comprehensive (loss) income before reclassifications (35,872 ) 5,970 — — (29,902 ) Reclassification adjustments included in net income 2,549 (458 ) (4 ) 1,095 3,182 Income tax benefit (expense) 6,997 (1,158 ) 2 (230 ) 5,611 Net current-period other comprehensive (loss) income, net of tax (26,326 ) 4,354 (2 ) 865 (21,109 ) Ending balance, net of tax $ (42,536 ) $ 10,753 $ (135 ) $ (25,404 ) $ (57,322 ) (1) The Company adopted ASU 2016-01 on January 1, 2018. This amount includes a reclassification for the cumulative adjustment to retained earnings of $107,000 ( $85,000 , net of tax). |
Reclassifications out of accumulated other comprehensive income | The reclassification adjustments out of accumulated other comprehensive income (loss) included in net income are presented below (in thousands): Three Months Ended Six Months Ended 2019 2018 2019 2018 Unrealized losses on securities transferred: Amortization of unrealized losses (1) $ (80 ) $ (1,252 ) $ (571 ) $ (1,390 ) Tax benefit 17 263 120 292 Net of tax (63 ) (989 ) (451 ) (1,098 ) Unrealized gains and losses on available for sale securities: Realized net gain (loss) on sale of securities (2) 416 (332 ) 672 (1,159 ) Tax (expense) benefit (87 ) 70 (141 ) 243 Net of tax 329 (262 ) 531 (916 ) Derivatives: Realized net gain on interest rate swap derivatives (3) 621 309 1,267 415 Tax expense (130 ) (65 ) (266 ) (87 ) Net of tax 491 244 1,001 328 Amortization of unrealized gains on terminated interest rate swap derivatives (3) 21 22 43 43 Tax expense (4 ) (5 ) (9 ) (9 ) Net of tax 17 17 34 34 Amortization of pension plan: Net actuarial loss (4) (651 ) (620 ) (1,193 ) (1,095 ) Prior service credit (4) 3 2 4 4 Total before tax (648 ) (618 ) (1,189 ) (1,091 ) Tax benefit 136 129 250 228 Net of tax (512 ) (489 ) (939 ) (863 ) Total reclassifications for the period, net of tax $ 262 $ (1,479 ) $ 176 $ (2,515 ) (1) Included in interest income on the consolidated statements of income. (2) Listed as net gain (loss) on sale of securities available for sale on the consolidated statements of income. (3) Included in interest expense for Federal Home Loan Bank of Dallas (“FHLB”) borrowings on the consolidated statements of income. (4) These accumulated other comprehensive income components are included in the computation of net periodic pension cost (income) presented in “Note 9 - Employee Benefit Plans.” |
Securities (Tables)
Securities (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Investments, Debt and Equity Securities [Abstract] | |
Amortized cost and estimated fair value of investment and mortgage-backed securities | The amortized cost, gross unrealized gains and losses and estimated fair value of investment and mortgage-backed securities available for sale (“AFS”) and held to maturity (“HTM”) as of June 30, 2019 and December 31, 2018 are reflected in the tables below (in thousands): June 30, 2019 Amortized Gross Unrealized Gross Unrealized Estimated AVAILABLE FOR SALE Cost Gains Losses Fair Value Investment securities: State and political subdivisions $ 512,575 $ 16,758 $ 478 $ 528,855 Other stocks and bonds 3,000 — 41 2,959 Mortgage-backed securities: (1) Residential 1,296,888 22,944 846 1,318,986 Commercial 233,044 4,963 20 237,987 Total $ 2,045,507 $ 44,665 $ 1,385 $ 2,088,787 HELD TO MATURITY Investment securities: State and political subdivisions $ 3,018 $ 36 $ — $ 3,054 Mortgage-backed securities: (1) Residential 59,756 2,496 144 62,108 Commercial 84,317 1,984 156 86,145 Total $ 147,091 $ 4,516 $ 300 $ 151,307 December 31, 2018 Amortized Gross Unrealized Gross Unrealized Estimated AVAILABLE FOR SALE Cost Gains Losses Fair Value Investment securities: State and political subdivisions $ 728,142 $ 6,115 $ 17,656 $ 716,601 Other stocks and bonds 3,000 — 291 2,709 Mortgage-backed securities: (1) Residential 738,585 3,498 9,111 732,972 Commercial 543,758 941 7,545 537,154 Total $ 2,013,485 $ 10,554 $ 34,603 $ 1,989,436 HELD TO MATURITY Investment securities: State and political subdivisions $ 3,083 $ 5 $ 42 $ 3,046 Mortgage-backed securities: (1) Residential 59,655 154 1,140 58,669 Commercial 100,193 201 2,328 98,066 Total $ 162,931 $ 360 $ 3,510 $ 159,781 (1) All mortgage-backed securities issued and/or guaranteed by U.S. government agencies or U.S. government-sponsored enterprises. |
Unrealized loss on securities | The following tables represent the estimated fair value and unrealized loss on investment and mortgage-backed securities AFS and HTM as of June 30, 2019 and December 31, 2018 (in thousands): June 30, 2019 Less Than 12 Months More Than 12 Months Total Fair Value Unrealized Loss Fair Value Unrealized Loss Fair Value Unrealized Loss AVAILABLE FOR SALE Investment securities: State and political subdivisions $ 2,281 $ 10 $ 28,087 $ 468 $ 30,368 $ 478 Other stocks and bonds 2,959 41 — — 2,959 41 Mortgage-backed securities: Residential 629 2 91,649 844 92,278 846 Commercial — — 15,033 20 15,033 20 Total $ 5,869 $ 53 $ 134,769 $ 1,332 $ 140,638 $ 1,385 HELD TO MATURITY Mortgage-backed securities: Residential $ — $ — $ 2,579 $ 144 $ 2,579 $ 144 Commercial — — 14,701 156 14,701 156 Total $ — $ — $ 17,280 $ 300 $ 17,280 $ 300 December 31, 2018 Less Than 12 Months More Than 12 Months Total Fair Value Unrealized Fair Value Unrealized Fair Value Unrealized AVAILABLE FOR SALE Investment securities: State and political subdivisions $ 98,112 $ 899 $ 399,205 $ 16,757 $ 497,317 $ 17,656 Other stocks and bonds 2,709 291 — — 2,709 291 Mortgage-backed securities: Residential 5,552 27 488,334 9,084 493,886 9,111 Commercial 9,529 30 457,704 7,515 467,233 7,545 Total $ 115,902 $ 1,247 $ 1,345,243 $ 33,356 $ 1,461,145 $ 34,603 HELD TO MATURITY Investment securities: State and political subdivisions $ 235 $ 1 $ 2,022 $ 41 $ 2,257 $ 42 Mortgage-backed securities: Residential 4,826 60 51,046 1,080 55,872 1,140 Commercial 399 2 89,168 2,326 89,567 2,328 Total $ 5,460 $ 63 $ 142,236 $ 3,447 $ 147,696 $ 3,510 |
Interest income recognized on securities | The following table reflects interest income recognized on securities for the periods presented (in thousands): Three Months Ended 2019 2018 U.S. Treasury $ — $ 23 State and political subdivisions 3,527 6,353 Other stocks and bonds 27 28 Mortgage-backed securities 13,246 10,210 Total interest income on securities $ 16,800 $ 16,614 Six Months Ended 2019 2018 U.S. Treasury $ — $ 131 U.S. government agency debentures — 89 State and political subdivisions 7,645 12,734 Other stocks and bonds 55 58 Mortgage-backed securities 25,720 21,104 Total interest income on securities $ 33,420 $ 34,116 |
Amortized cost, carrying value and fair value of securities presented by contractual maturity | The amortized cost and estimated fair value of AFS and HTM securities at June 30, 2019 , are presented below by contractual maturity (in thousands). Expected maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations. MBS are presented in total by category due to the fact that MBS typically are issued with stated principal amounts, and the securities are backed by pools of mortgages that have loans with varying maturities. The characteristics of the underlying pool of mortgages, such as fixed-rate or adjustable-rate, as well as prepayment risk, are passed on to the security holder. The term of a mortgage-backed pass-through security thus approximates the term of the underlying mortgages and can vary significantly due to prepayments. June 30, 2019 Amortized Cost Fair Value AVAILABLE FOR SALE Investment securities: Due in one year or less $ 3,349 $ 3,363 Due after one year through five years 8,406 8,469 Due after five years through ten years 28,488 29,573 Due after ten years 475,332 490,409 515,575 531,814 Mortgage-backed securities 1,529,932 1,556,973 Total $ 2,045,507 $ 2,088,787 June 30, 2019 Amortized Cost Fair Value HELD TO MATURITY Investment securities: Due in one year or less $ 115 $ 115 Due after one year through five years 1,658 1,675 Due after five years through ten years 1,245 1,264 Due after ten years — — 3,018 3,054 Mortgage-backed securities: 144,073 148,253 Total $ 147,091 $ 151,307 |
Unrealized and realized gains (losses) recognized in net income on equity investments | The following is a summary of unrealized and realized gains and losses on equity investments recognized in other noninterest income in the consolidated statements of income during the three and six months ended June 30, 2019 and 2018 (in thousands): Three Months Ended Six Months Ended 2019 2018 2019 2018 Net gains (losses) recognized during the period on equity investments $ 87 $ (42 ) $ 163 $ (134 ) Less: Net gains (losses) recognized during the period on equity investments sold during the period — — — — Unrealized gains (losses) recognized during the reporting period on equity investments still held at the reporting date $ 87 $ (42 ) $ 163 $ (134 ) |
Loans and Allowance for Proba_2
Loans and Allowance for Probable Loan Losses (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Receivables [Abstract] | |
Classification of loans in the consolidated balance sheets | Loans in the accompanying consolidated balance sheets are classified as follows (in thousands): June 30, 2019 December 31, 2018 Real estate loans: Construction $ 579,565 $ 507,732 1-4 family residential 782,073 794,499 Commercial 1,251,248 1,194,118 Commercial loans 389,521 356,649 Municipal loans 357,028 353,370 Loans to individuals 100,708 106,431 Total loans 3,460,143 3,312,799 Less: Allowance for loan losses (1) 24,705 27,019 Net loans $ 3,435,438 $ 3,285,780 (1) The allowance for loan losses recorded on purchased credit impaired (“PCI”) loans totaled $139,000 and $302,000 as of June 30, 2019 and December 31, 2018 , respectively. |
Activity in the allowance for loan losses by portfolio segment | The following tables detail activity in the allowance for loan losses by portfolio segment for the periods presented (in thousands): Three Months Ended June 30, 2019 Real Estate Construction 1-4 Family Residential Commercial Commercial Loans Municipal Loans Loans to Individuals Total Balance at beginning of period $ 4,259 $ 3,382 $ 10,660 $ 4,287 $ 508 $ 1,059 $ 24,155 Provision (reversal) for loan losses (2) (660 ) 137 1,516 1,266 22 225 2,506 Loans charged off — — (1,661 ) (130 ) — (606 ) (2,397 ) Recoveries of loans charged off — 3 19 123 — 296 441 Balance at end of period $ 3,599 $ 3,522 $ 10,534 $ 5,546 $ 530 $ 974 $ 24,705 Six Months Ended June 30, 2019 Real Estate Construction 1-4 Family Residential Commercial Commercial Loans Municipal Loans Loans to Individuals Total Balance at beginning of period $ 3,597 $ 3,844 $ 13,968 $ 3,974 $ 525 $ 1,111 $ 27,019 Provision (reversal) for loan losses (2) 2 (310 ) (596 ) 2,000 5 487 1,588 Loans charged off — (18 ) (2,876 ) (581 ) — (1,207 ) (4,682 ) Recoveries of loans charged off — 6 38 153 — 583 780 Balance at end of period $ 3,599 $ 3,522 $ 10,534 $ 5,546 $ 530 $ 974 $ 24,705 Three Months Ended June 30, 2018 Real Estate Construction 1-4 Family Residential Commercial Commercial Loans Municipal Loans Loans to Individuals Total Balance at beginning of period $ 3,597 $ 2,377 $ 14,089 $ 2,385 $ 851 $ 921 $ 24,220 Provision (reversal) for loan losses (2) 244 403 (57 ) 328 8 355 1,281 Loans charged off — (57 ) — (172 ) — (688 ) (917 ) Recoveries of loans charged off — 7 4 19 — 458 488 Balance at end of period $ 3,841 $ 2,730 $ 14,036 $ 2,560 $ 859 $ 1,046 $ 25,072 Six Months Ended June 30, 2018 Real Estate Construction 1-4 Family Residential Commercial Commercial Loans Municipal Loans Loans to Individuals Total Balance at beginning of period (1) $ 3,676 $ 2,445 $ 10,821 $ 2,094 $ 860 $ 885 $ 20,781 Provision (reversal) for loan losses (2) 179 321 3,209 661 (1 ) 647 5,016 Loans charged off (14 ) (57 ) — (257 ) — (1,356 ) (1,684 ) Recoveries of loans charged off — 21 6 62 — 870 959 Balance at end of period $ 3,841 $ 2,730 $ 14,036 $ 2,560 $ 859 $ 1,046 $ 25,072 (1) Loans acquired with the Diboll acquisition were measured at fair value on November 30, 2017 with no carryover of allowance for loan losses. (2) Of the $2.5 million and $1.6 million provision for loan losses for the three and six months ended June 30, 2019 , $111,000 and $163,000 related to provision expense reversed on PCI loans, respectively. Of the $1.3 million and $5.0 million recorded in provision for loan losses for the three and six months ended June 30, 2018 , $358,000 related to provision expense on PCI loans. |
Balance in the allowance for loan losses by portfolio segment based on impairment method | The following tables present the balance in the allowance for loan losses by portfolio segment based on impairment method (in thousands): June 30, 2019 Real Estate Construction 1-4 Family Residential Commercial Commercial Loans Municipal Loans Loans to Individuals Total Ending balance – individually evaluated for impairment (1) $ 23 $ 66 $ 1,408 $ 782 $ — $ 90 $ 2,369 Ending balance – collectively evaluated for impairment 3,576 3,456 9,126 4,764 530 884 22,336 Balance at end of period $ 3,599 $ 3,522 $ 10,534 $ 5,546 $ 530 $ 974 $ 24,705 December 31, 2018 Real Estate Construction 1-4 Family Residential Commercial Commercial Loans Municipal Loans Loans to Individuals Total Ending balance – individually evaluated for impairment (1) $ 13 $ 40 $ 5,337 $ 368 $ 1 $ 149 $ 5,908 Ending balance – collectively evaluated for impairment 3,584 3,804 8,631 3,606 524 962 21,111 Balance at end of period $ 3,597 $ 3,844 $ 13,968 $ 3,974 $ 525 $ 1,111 $ 27,019 (1) The allowance for loan losses on PCI loans totaled $139,000 and $302,000 as of June 30, 2019 and December 31, 2018 , respectively. |
Balance in recorded investments in loans by portfolio segment based on impairment method | The following tables present the recorded investment in loans by portfolio segment based on impairment method (in thousands): June 30, 2019 Real Estate Construction 1-4 Family Residential Commercial Commercial Loans Municipal Loans Loans to Individuals Total Loans individually evaluated for impairment $ 200 $ 1,268 $ 21,361 $ 2,523 $ 429 $ 136 $ 25,917 Loans collectively evaluated for impairment 579,226 772,725 1,198,899 385,322 356,599 100,354 3,393,125 Purchased credit impaired loans 139 8,080 30,988 1,676 — 218 41,101 Total ending loan balance $ 579,565 $ 782,073 $ 1,251,248 $ 389,521 $ 357,028 $ 100,708 $ 3,460,143 December 31, 2018 Real Estate Construction 1-4 Family Residential Commercial Commercial Loans Municipal Loans Loans to Individuals Total Loans individually evaluated for impairment $ 12 $ 1,215 $ 33,013 $ 1,394 $ 429 $ 184 $ 36,247 Loans collectively evaluated for impairment 507,564 782,614 1,128,220 353,036 352,941 105,775 3,230,150 Purchased credit impaired loans 156 10,670 32,885 2,219 — 472 46,402 Total ending loan balance $ 507,732 $ 794,499 $ 1,194,118 $ 356,649 $ 353,370 $ 106,431 $ 3,312,799 |
Summary of loans by credit quality indicators | The following tables set forth credit quality indicators by class of loans for the periods presented (in thousands): June 30, 2019 Pass Pass Watch (1) Special Mention (1) Substandard (1) Doubtful (1) Total Real estate loans: Construction $ 579,253 $ 47 $ — $ 265 $ — $ 579,565 1-4 family residential 776,375 31 166 4,784 717 782,073 Commercial 1,150,646 55,208 7,444 37,793 157 1,251,248 Commercial loans 375,664 3,362 6,063 4,163 269 389,521 Municipal loans 357,028 — — — — 357,028 Loans to individuals 100,030 — — 380 298 100,708 Total $ 3,338,996 $ 58,648 $ 13,673 $ 47,385 $ 1,441 $ 3,460,143 December 31, 2018 Pass Pass Watch (1) Special Mention (1) Substandard (1) Doubtful (1) Total Real estate loans: Construction $ 507,529 $ 163 $ — $ 28 $ 12 $ 507,732 1-4 family residential 787,516 37 100 5,489 1,357 794,499 Commercial 1,067,874 11,479 26,490 87,767 508 1,194,118 Commercial loans 349,495 520 3,189 2,988 457 356,649 Municipal loans 353,370 — — — — 353,370 Loans to individuals 105,536 4 4 678 209 106,431 Total $ 3,171,320 $ 12,203 $ 29,783 $ 96,950 $ 2,543 $ 3,312,799 (1) Includes PCI loans comprised of $15,000 pass watch, $217,000 special mention, $2.7 million substandard and $305,000 doubtful as of June 30, 2019 . Includes PCI loans comprised of $22,000 pass watch, $859,000 special mention, $3.9 million substandard and $1.2 million doubtful as of December 31, 2018 . |
Summary of nonperforming assets for the period | The following table sets forth nonperforming assets for the periods presented (in thousands): June 30, 2019 December 31, 2018 Nonaccrual loans (1) (2) $ 16,376 $ 35,770 Accruing loans past due more than 90 days (1) — — Restructured loans (3) 11,918 5,930 Other real estate owned 1,069 1,206 Repossessed assets — — Total nonperforming assets $ 29,363 $ 42,906 (1) Excludes PCI loans measured at fair value at acquisition if the timing and amount of cash flows expected to be collected from those sales can be reasonably estimated. (2) Includes $8.9 million and $10.9 million of restructured loans as of June 30, 2019 and December 31, 2018 , respectively. (3) Includes $776,000 and $3.1 million in PCI loans restructured as of June 30, 2019 and December 31, 2018 , respectively. |
Recorded investment in nonaccrual by class of loans | The following table sets forth the recorded investment in nonaccrual loans by class of loans for the periods presented (in thousands). The table excludes PCI loans measured at fair value at acquisition: Nonaccrual Loans June 30, 2019 December 31, 2018 Real estate loans: Construction $ 200 $ 12 1-4 family residential 1,418 2,202 Commercial 13,383 32,599 Commercial loans 1,047 639 Loans to individuals 328 318 Total $ 16,376 $ 35,770 |
Summary of impaired loans by class of loans for the period | The following tables set forth impaired loans by class of loans, including the unpaid contractual principal balance, the recorded investment and the related allowance for loan losses for the periods presented (in thousands). Impaired loans include restructured and nonaccrual loans for which the allowance was measured in accordance with section 310-10 of ASC Topic 310, “Receivables.” There were no impaired loans recorded without an allowance as of June 30, 2019 or December 31, 2018 . June 30, 2019 Unpaid Contractual Principal Balance Recorded Investment Related Allowance for Loan Losses Real estate loans: Construction $ 356 $ 323 $ 23 1-4 family residential 8,646 7,491 66 Commercial 26,198 22,999 1,408 Commercial loans 4,033 3,449 782 Municipal loans 429 429 — Loans to individuals 481 354 90 Total (1) $ 40,143 $ 35,045 $ 2,369 December 31, 2018 Unpaid Contractual Principal Balance Recorded Investment Related Allowance for Loan Losses Real estate loans: Construction $ 182 $ 148 $ 13 1-4 family residential 6,507 5,923 40 Commercial 36,457 34,744 5,337 Commercial loans 2,874 2,366 368 Municipal loans 429 429 1 Loans to individuals 825 657 149 Total (1) $ 47,274 $ 44,267 $ 5,908 (1) Includes $9.1 million and $8.0 million of PCI loans that experienced deterioration in credit quality subsequent to the acquisition date as of June 30, 2019 and December 31, 2018 , respectively. |
Aging of recorded investment in past due loans by class of loans | The following tables present the aging of the recorded investment in past due loans by class of loans (in thousands): June 30, 2019 30-59 Days Past Due 60-89 Days Past Due Greater than 90 Days Past Due Total Past Due Current (1) Total Real estate loans: Construction $ 343 $ 276 $ 193 $ 812 $ 578,753 $ 579,565 1-4 family residential 2,250 1,330 293 3,873 778,200 782,073 Commercial 1,625 425 109 2,159 1,249,089 1,251,248 Commercial loans 2,070 567 619 3,256 386,265 389,521 Municipal loans — — — — 357,028 357,028 Loans to individuals 555 194 137 886 99,822 100,708 Total $ 6,843 $ 2,792 $ 1,351 $ 10,986 $ 3,449,157 $ 3,460,143 December 31, 2018 30-59 Days Past Due 60-89 Days Past Due Greater than 90 Days Past Due Total Past Due Current (1) Total Real estate loans: Construction $ 627 $ 307 $ — $ 934 $ 506,798 $ 507,732 1-4 family residential 7,441 1,258 1,335 10,034 784,465 794,499 Commercial 10,663 7,655 — 18,318 1,175,800 1,194,118 Commercial loans 1,946 705 591 3,242 353,407 356,649 Municipal loans — — — — 353,370 353,370 Loans to individuals 1,289 351 146 1,786 104,645 106,431 Total $ 21,966 $ 10,276 $ 2,072 $ 34,314 $ 3,278,485 $ 3,312,799 (1) Includes PCI loans measured at fair value at acquisition if the timing and amount of cash flows expected to be collected from those sales can be reasonably estimated. |
Average recorded investment and interest income on impaired loans | The following table sets forth average recorded investment and interest income recognized on impaired loans by class of loans for the periods presented (in thousands). The table excludes PCI loans measured at fair value at acquisition that have not experienced further deterioration in credit quality subsequent to the acquisition date: Three Months Ended June 30, 2019 June 30, 2018 Average Recorded Investment Interest Income Recognized Average Recorded Investment Interest Income Recognized Real estate loans: Construction $ 214 $ 5 $ 140 $ 1 1-4 family residential 7,533 130 3,955 47 Commercial 24,394 153 31,916 5 Commercial loans 2,753 38 2,024 19 Municipal loans 429 6 502 7 Loans to individuals 438 9 242 3 Total $ 35,761 $ 341 $ 38,779 $ 82 Six Months Ended June 30, 2019 June 30, 2018 Average Recorded Investment Interest Income Recognized Average Recorded Interest Income Recognized Real estate loans: Construction $ 200 $ 9 $ 114 $ 1 1-4 family residential 6,271 210 3,945 93 Commercial 30,917 440 20,595 9 Commercial loans 2,699 68 1,900 36 Municipal loans 429 12 502 14 Loans to individuals 517 20 221 4 Total $ 41,033 $ 759 $ 27,277 $ 157 |
Schedule of recorded investment in loans modified | The following tables set forth the recorded balance of loans considered to be TDRs that were restructured and the type of concession by class of loans during the periods presented (dollars in thousands): Three Months Ended June 30, 2019 Extend Amortization Period Interest Rate Reductions Combination Total Modifications Number of Loans Real estate loans: 1-4 family residential $ — $ — $ — $ — — Commercial — — 96 96 1 Commercial loans — — 485 485 4 Loans to individuals — — 25 25 3 Total $ — $ — $ 606 $ 606 8 Six Months Ended June 30, 2019 Extend Amortization Period Interest Rate Reductions Combination Total Modifications Number of Loans Real estate loans: 1-4 family residential $ — $ — $ 111 $ 111 1 Commercial 7,594 — 96 7,690 2 Commercial loans 56 — 485 541 5 Loans to individuals — — 39 39 5 Total $ 7,650 $ — $ 731 $ 8,381 13 Three Months Ended June 30, 2018 Extend Amortization Period Interest Rate Reductions Combination Total Modifications Number of Loans Real estate loans: 1-4 family residential $ — $ 80 $ — $ 80 1 Commercial loans — — 90 90 2 Loans to individuals 9 — 13 22 3 Total $ 9 $ 80 $ 103 $ 192 6 Six Months Ended June 30, 2018 Extend Amortization Period Interest Rate Reductions Combination Total Modifications Number of Loans Real estate loans: 1-4 family residential $ — $ 80 $ — $ 80 1 Commercial loans 132 — 90 222 5 Loans to individuals 106 — 13 119 4 Total $ 238 $ 80 $ 103 $ 421 10 |
Schedule of PCI Loans | The following table presents the outstanding principal balance and carrying value for PCI loans for the periods presented (in thousands): June 30, 2019 December 31, 2018 Outstanding principal balance $ 45,430 $ 51,388 Carrying amount $ 41,101 $ 46,402 |
Schedule of changes in accretable yield for pci loans | The following table presents the changes in the accretable yield for PCI loans during the periods presented (in thousands): Three Months Ended Six Months Ended 2019 2018 2019 2018 Balance at beginning of period $ 14,520 $ 15,818 $ 15,054 $ 18,721 Changes in expected cash flows not affecting non-accretable differences — — — (1,445 ) Reclassifications (to) from nonaccretable discount 812 1,090 1,074 770 Accretion (776 ) (803 ) (1,572 ) (1,941 ) Balance at end of period $ 14,556 $ 16,105 $ 14,556 $ 16,105 |
Borrowing Arrangements (Tables)
Borrowing Arrangements (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Debt Disclosure [Abstract] | |
Schedule of Debt | Information related to borrowings is provided in the table below (dollars in thousands): June 30, December 31, 2018 Other borrowings: Balance at end of period $ 26,064 $ 36,810 Average amount outstanding during the period (1) 15,653 10,880 Maximum amount outstanding during the period (2) 28,354 36,810 Weighted average interest rate during the period (3) 1.7 % 1.4 % Interest rate at end of period (4) 2.0 % 2.1 % Federal Home Loan Bank borrowings: Balance at end of period $ 823,757 $ 719,065 Average amount outstanding during the period (1) 785,901 720,785 Maximum amount outstanding during the period (2) 1,004,997 957,231 Weighted average interest rate during the period (3) 2.1 % 1.8 % Interest rate at end of period (4) 2.4 % 2.3 % (1) The average amount outstanding during the period was computed by dividing the total daily outstanding principal balances by the number of days in the period. (2) The maximum amount outstanding at any month-end during the period. (3) The weighted average interest rate during the period was computed by dividing the actual interest expense (annualized for interim periods) by the average amount outstanding during the period. The weighted average interest rate on the FHLB borrowings includes the effect of interest rate swaps. (4) Stated rate. |
Schedule of Maturities of Borrowings | Maturities of the obligations associated with our borrowing arrangements based on scheduled repayments at June 30, 2019 are as follows (in thousands): Payments Due by Period Less than 1 Year 1-2 Years 2-3 Years 3-4 Years 4-5 Years Thereafter Total Other borrowings $ 25,931 $ 133 $ — $ — $ — $ — $ 26,064 Federal Home Loan Bank borrowings 796,765 21,374 — — — 5,618 823,757 Total obligations $ 822,696 $ 21,507 $ — $ — $ — $ 5,618 $ 849,821 |
Long-term Debt Long-term Obli_2
Long-term Debt Long-term Obligations (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt Instruments [Table Text Block] | June 30, December 31, (in thousands) Subordinated notes: (1) 5.50% Subordinated Notes, net of unamortized debt issuance costs (2) $ 98,490 $ 98,407 Total Subordinated notes 98,490 98,407 Trust preferred subordinated debentures: (3) Southside Statutory Trust III, net of unamortized debt issuance costs (4) 20,556 20,554 Southside Statutory Trust IV 23,196 23,196 Southside Statutory Trust V 12,887 12,887 Magnolia Trust Company I 3,609 3,609 Total Trust preferred subordinated debentures 60,248 60,246 Total Long-term debt $ 158,738 $ 158,653 (1) This debt consists of subordinated notes with a remaining maturity greater than one year that qualify under the risk-based capital guidelines as Tier 2 capital, subject to certain limitations. (2) The unamortized discount and debt issuance costs reflected in the carrying amount of the subordinated notes totaled approximately $1.5 million at June 30, 2019 and $1.6 million at December 31, 2018 . (3) This debt consists of trust preferred securities that qualify under the risk-based capital guidelines as Tier 1 capital, subject to certain limitations. (4) The unamortized debt issuance costs reflected in the carrying amount of the Southside Statutory Trust III junior subordinated debentures totaled $63,000 at June 30, 2019 and $65,000 at December 31, 2018 . |
Schedule of Subordinated Borrowing [Table Text Block] | As of June 30, 2019 , the details of the subordinated notes and the trust preferred subordinated debentures are summarized below (dollars in thousands): Date Issued Amount Issued Fixed or Floating Rate Interest Rate Maturity Date 5.50% Subordinated Notes September 19, 2016 $ 100,000 Fixed-to-Floating 5.50% September 30, 2026 Southside Statutory Trust III September 4, 2003 $ 20,619 Floating 3 month LIBOR + 2.94% September 4, 2033 Southside Statutory Trust IV August 8, 2007 $ 23,196 Floating 3 month LIBOR + 1.30% October 30, 2037 Southside Statutory Trust V August 10, 2007 $ 12,887 Floating 3 month LIBOR + 2.25% September 15, 2037 Magnolia Trust Company I (1) October 10, 2007 $ 3,609 Floating 3 month LIBOR + 1.80% November 23, 2035 (1) On October 10, 2007, as part of an acquisition we assumed $3.6 million of floating rate junior subordinated debentures issued in 2005 to Magnolia Trust Company I. |
Employee Benefit Plans (Tables)
Employee Benefit Plans (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Defined Contribution Plan [Abstract] | |
The components of net periodic benefit cost | The components of net periodic benefit cost (income) related to our employee benefit plans are as follows (in thousands): Three Months Ended June 30, Defined Benefit Defined Benefit Pension Plan Acquired Restoration 2019 2018 2019 2018 2019 2018 Service cost $ 394 $ 390 $ — $ — $ 110 $ 84 Interest cost 919 839 43 41 195 165 Expected return on assets (1,511 ) (1,622 ) (73 ) (72 ) — — Net loss amortization 470 372 — — 181 248 Prior service (credit) cost amortization (4 ) (4 ) — — 1 2 Net periodic benefit cost (income) $ 268 $ (25 ) $ (30 ) $ (31 ) $ 487 $ 499 Six Months Ended June 30, Defined Benefit Defined Benefit Pension Plan Acquired Restoration 2019 2018 2019 2018 2019 2018 Service cost $ 710 $ 774 $ — $ — $ 170 $ 147 Interest cost 1,827 1,696 84 82 356 298 Expected return on assets (3,015 ) (3,242 ) (146 ) (145 ) — — Net loss amortization 913 756 — — 280 339 Prior service (credit) cost amortization (7 ) (7 ) — — 3 3 Net periodic benefit cost (income) $ 428 $ (23 ) $ (62 ) $ (63 ) $ 809 $ 787 |
Derivative Financial Instrume_2
Derivative Financial Instruments and Hedging Activities (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Derivative Instruments in Statement of Financial Position, Fair Value [Table Text Block] | The following tables present the notional and estimated fair value amount of derivative positions outstanding (in thousands): June 30, 2019 December 31, 2018 Estimated Fair Value Estimated Fair Value Notional (1) Asset Derivative Liability Derivative Notional (1) Asset Derivative Liability Derivative Derivatives designated as hedging instruments Interest rate contracts: Swaps-Cash flow Hedge-Financial institution counterparties $ 270,000 $ 2,334 $ 3,442 $ 270,000 $ 9,388 $ 457 Swaps-Fair Value Hedge-Financial institution counterparties — — — 21,100 — 657 Derivatives designated as non-hedging instruments Interest rate contracts: Swaps-Financial institution counterparties 110,699 16 6,614 93,967 1,119 1,087 Swaps-Customer counterparties 110,699 6,614 16 93,967 1,087 1,119 Gross derivatives 8,964 10,072 11,594 3,320 Offsetting derivative assets/liabilities (2,350 ) (2,350 ) (2,201 ) (2,201 ) Cash collateral received/posted — (7,420 ) (8,306 ) — Net derivatives included in the consolidated balance sheets (2) $ 6,614 $ 302 $ 1,087 $ 1,119 (1) Notional amounts, which represent the extent of involvement in the derivatives market, are used to determine the contractual cash flows required in accordance with the terms of the agreement. These amounts are typically not exchanged, significantly exceed amounts subject to credit or market risk and are not reflected in the consolidated balance sheets. (2) Net derivative assets are included in other assets and net derivative liabilities are included in other liabilities on the consolidated balance sheets. Included in the fair value of net derivative assets and net derivative liabilities are credit valuation adjustments reflecting counterparty credit risk and our credit risk. We had no credit exposure related to interest rate swaps with financial institutions and $6.6 million related to interest rate swaps with customers at June 30, 2019 . We had no credit exposure related to interest rate swaps with financial institutions and $1.1 million related to interest rate swaps with customers at December 31, 2018 |
Weighted Average Maturity And Interest Rates On Risk Management Interest Rate Swaps [Table Text Block] | The summarized expected weighted average remaining maturity of the notional amount of interest rate swaps and the weighted average interest rates associated with the amounts expected to be received or paid on interest rate swap agreements are presented below (dollars in thousands). Variable rates received on pay fixed swaps are based on one-month or three-month LIBOR rates in effect at June 30, 2019 and December 31, 2018 : June 30, 2019 December 31, 2018 Weighted Average Weighted Average Notional Amount Remaining Maturity (in years) Receive Rate Pay Rate Notional Amount Remaining Maturity Receive Rate Pay Swaps-Cash flow hedge Financial institution counterparties $ 270,000 4.3 2.44 % 1.58 % $ 270,000 4.8 2.45 % 1.58 % Swaps-Fair value hedge Financial institution counterparties — — — — 21,100 7.5 2.56 3.00 Swaps-Non-hedging Financial institution counterparties 110,699 11.6 2.42 2.57 93,967 11.6 2.36 2.58 Customer counterparties 110,699 11.6 2.57 2.42 93,967 11.6 2.58 2.36 |
Fair Value Measurement (Tables)
Fair Value Measurement (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Fair Value Disclosures [Abstract] | |
Summary of fair value measurement on recurring and nonrecurring basis segregated by level of valuation inputs within fair value hierarchy utilized to measure fair value | The following tables summarize assets measured at fair value on a recurring and nonrecurring basis segregated by the level of the valuation inputs within the fair value hierarchy utilized to measure fair value (in thousands): June 30, 2019 Fair Value Measurements at the End of the Reporting Period Using Carrying Amount Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Recurring fair value measurements Investment securities: State and political subdivisions $ 528,855 $ — $ 528,855 $ — Other stocks and bonds 2,959 — 2,959 — Mortgage-backed securities: (1) Residential 1,318,986 — 1,318,986 — Commercial 237,987 — 237,987 — Equity investments: Equity investments 5,948 5,948 — — Derivative assets: Interest rate swaps 8,964 — 8,964 — Total asset recurring fair value measurements $ 2,103,699 $ 5,948 $ 2,097,751 $ — Derivative liabilities: Interest rate swaps $ 10,072 $ — $ 10,072 $ — Total liability recurring fair value measurements $ 10,072 $ — $ 10,072 $ — Nonrecurring fair value measurements Foreclosed assets $ 1,069 $ — $ — $ 1,069 Impaired loans (2) 32,148 — — 32,148 Total asset nonrecurring fair value measurements $ 33,217 $ — $ — $ 33,217 December 31, 2018 Fair Value Measurements at the End of the Reporting Period Using Carrying Amount Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Recurring fair value measurements Investment securities: State and political subdivisions $ 716,601 $ — $ 716,601 $ — Other stocks and bonds 2,709 — 2,709 — Mortgage-backed securities: (1) Residential 732,972 — 732,972 — Commercial 537,154 — 537,154 — Equity investments: Equity investments 5,791 5,791 — — Derivative assets: Interest rate swaps 11,594 — 11,594 — Total asset recurring fair value measurements $ 2,006,821 $ 5,791 $ 2,001,030 $ — Derivative liabilities: Interest rate swaps $ 3,320 $ — $ 3,320 $ — Total liability recurring fair value measurements $ 3,320 $ — $ 3,320 $ — Nonrecurring fair value measurements Foreclosed assets $ 1,206 $ — $ — $ 1,206 Impaired loans (2) 37,813 — — 37,813 Total asset nonrecurring fair value measurements $ 39,019 $ — $ — $ 39,019 (1) All mortgage-backed securities are issued and/or guaranteed by U.S. government agencies or U.S. government-sponsored enterprises. (2) Impaired loans represent collateral-dependent loans with a specific valuation allowance. Losses on these loans represent charge-offs which are netted against the allowance for loan losses. |
Financial assets, financial liabilities, and unrecognized financial instruments at carrying amount and fair value | The following tables present our financial assets and financial liabilities measured on a nonrecurring basis at both their respective carrying amounts and estimated fair value (in thousands): Estimated Fair Value June 30, 2019 Carrying Total Level 1 Level 2 Level 3 Financial assets: Cash and cash equivalents $ 132,521 $ 132,521 $ 132,521 $ — $ — Investment securities: Held to maturity, at carrying value 3,018 3,054 — 3,054 — Mortgage-backed securities: Held to maturity, at carrying value 144,073 148,253 — 148,253 — Federal Home Loan Bank stock, at cost 44,718 44,718 — 44,718 — Equity investments 6,426 6,426 — 6,426 — Loans, net of allowance for loan losses 3,435,438 3,493,559 — — 3,493,559 Loans held for sale 1,812 1,812 — 1,812 — Financial liabilities: Deposits $ 4,479,256 $ 4,478,936 $ — $ 4,478,936 $ — Other borrowings 26,064 26,064 — 26,064 — Federal Home Loan Bank borrowings 823,757 825,450 — 825,450 — Subordinated notes, net of unamortized debt issuance costs 98,490 98,964 — 98,964 — Trust preferred subordinated debentures, net of unamortized debt issuance costs 60,248 58,819 — 58,819 — Estimated Fair Value December 31, 2018 Carrying Total Level 1 Level 2 Level 3 Financial assets: Cash and cash equivalents $ 120,719 $ 120,719 $ 120,719 $ — $ — Investment securities: Held to maturity, at carrying value 3,083 3,046 — 3,046 — Mortgage-backed securities: Held to maturity, at carrying value 159,848 156,735 — 156,735 — Federal Home Loan Bank stock, at cost 32,583 32,583 — 32,583 — Equity investments 6,302 6,302 — 6,302 — Loans, net of allowance for loan losses 3,285,780 3,251,923 — — 3,251,923 Loans held for sale 601 601 — 601 — Financial liabilities: Deposits $ 4,425,030 $ 4,417,902 $ — $ 4,417,902 $ — Other borrowings 36,810 36,810 — 36,810 — Federal Home Loan Bank borrowings 719,065 708,904 — 708,904 — Subordinated notes, net of unamortized debt issuance costs 98,407 97,611 — 97,611 — Trust preferred subordinated debentures, net of unamortized debt issuance costs 60,246 54,729 — 54,729 — |
Income Taxes Income Taxes (Tab
Income Taxes Income Taxes (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | The income tax expense included in the accompanying consolidated statements of income consists of the following (in thousands): Three Months Ended Six Months Ended 2019 2018 2019 2018 Current income tax expense $ 3,553 $ 667 $ 6,564 $ 3,012 Deferred income tax expense 16 2,693 142 2,438 Income tax expense $ 3,569 $ 3,360 $ 6,706 $ 5,450 |
Leases (Tables)
Leases (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Leases [Abstract] | |
Leases Balance Sheet Information | Balance sheet information related to leases was as follows (in thousands): June 30, 2019 Operating leases: Operating lease right-of-use assets $ 9,812 Operating lease liabilities $ 10,204 Additional information related to leases was as follows: June 30, 2019 Weighted average remaining lease term (in years) 12.5 Weighted average discount rate 3.88 % |
Lease Expense | The components of lease cost were as follows (in thousands): Three Months Ended June 30, 2019 Six Months Ended June 30, 2019 Operating lease cost $ 395 $ 789 Supplemental cash flow information related to leases was as follows (in thousands): Three Months Ended June 30, 2019 Six Months Ended June 30, 2019 Cash paid for amounts included in the measurement of the lease liabilities: Operating cash flows from operating leases $ 360 $ 700 Right-of-use assets obtained in exchange for new operating lease liabilities $ 654 $ 654 |
Lessee, Operating Lease, Liability, Maturity | Future minimum rental commitments due under non-cancelable operating leases at June 30, 2019 were as follows (in thousands): Year ending December 31, 2019 (excluding the six months ended June 30, 2019) $ 625 2020 1,338 2021 1,232 2022 1,193 2023 1,044 2024 and thereafter 7,866 Total lease payments (1) 13,298 Less: Interest (3,094 ) Present value of lease liabilities $ 10,204 (1) Excludes $9.1 million of lease payments for a lease executed but not yet commenced. Lease will commence in 2020 with a lease term of 20.4 years . |
Gross Rental Income | Gross rental income from these leases were as follows (in thousands): Three Months Ended June 30, 2019 Six Months Ended June 30, 2019 Gross rental income $ 742 $ 1,487 |
Lessor, Operating Lease, Payments to be Received, Maturity | At June 30, 2019 , non-cancelable operating leases with future minimum lease payments are as follows (in thousands): Year ending December 31, 2019 (excluding the six months ended June 30, 2019) $ 1,388 2020 2,693 2021 1,576 2022 1,553 2023 1,316 2024 and thereafter 4,098 Total lease payments $ 12,624 |
Off-Balance-Sheet Arrangement_2
Off-Balance-Sheet Arrangements, Commitments and Contingencies (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of unused commitments | Financial instruments with off-balance-sheet risk were as follows (in thousands): June 30, 2019 December 31, 2018 Unused commitments: Commitments to extend credit $ 1,024,034 $ 874,557 Standby letters of credit 27,463 27,438 Total $ 1,051,497 $ 901,995 |
Summary of Significant Accoun_3
Summary of Significant Accounting and Reporting Policies - Reclassifications (Details) - USD ($) $ in Thousands | Jan. 01, 2019 | Jun. 30, 2019 | Dec. 31, 2018 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Operating lease liabilities | $ 10,204 | $ 0 | |
Right-of-Use assets obtained in exchange for operating lease liabilities | $ 9,812 | $ 0 | |
Accounting Standards Update 2017-08 | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Cumulative effect on Retained Earnings, before tax | $ (16,500) | ||
Accounting Standards Update 2016-02 | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Operating lease liabilities | 10,100 | ||
Right-of-Use assets obtained in exchange for operating lease liabilities | $ 9,800 |
Acquisition (Details)
Acquisition (Details) $ in Thousands | Nov. 30, 2017USD ($)banking_offices | Jun. 30, 2019USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) |
Business Acquisition [Line Items] | ||||
Goodwill | $ 201,116 | $ 201,116 | ||
Diboll State Bancshares, Inc. | ||||
Business Acquisition [Line Items] | ||||
Voting interests acquired | 100.00% | |||
Number of branches | banking_offices | 17 | |||
Acquisition, Total merger consideration | $ 224,300 | |||
Acquisition, Loans | 621,300 | |||
Acquisition, Investment securities | 234,400 | |||
Acquisition, Deposits | 899,300 | |||
Goodwill | $ 109,600 | $ 109,700 | ||
Core Deposits | Diboll State Bancshares, Inc. | ||||
Business Acquisition [Line Items] | ||||
Acquisition, Finite-lived intangible assets | $ 14,700 | |||
Amortization period | 9 years | |||
Trust Relationship Intangible | Diboll State Bancshares, Inc. | ||||
Business Acquisition [Line Items] | ||||
Acquisition, Finite-lived intangible assets | $ 5,400 | |||
Amortization period | 13 years |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2019 | Mar. 31, 2019 | Jun. 30, 2018 | Mar. 31, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Basic and Diluted Earnings: | ||||||
Net income | $ 18,610 | $ 18,817 | $ 20,203 | $ 16,251 | $ 37,427 | $ 36,454 |
Basic weighted-average shares outstanding (in shares) | 33,726 | 35,062 | 33,711 | 35,042 | ||
Add: Stock awards (in shares) | 150 | 171 | 151 | 175 | ||
Diluted weighted-average shares outstanding (in shares) | 33,876 | 35,233 | 33,862 | 35,217 | ||
Basic Earnings Per Share: | ||||||
Earnings per common share - basic (in dollars per share) | $ 0.55 | $ 0.58 | $ 1.11 | $ 1.04 | ||
Diluted Earnings Per Share: | ||||||
Earnings per common share - diluted (in dollars per share) | $ 0.55 | $ 0.57 | $ 1.11 | $ 1.04 | ||
Antidilutive securities excluded from calculating earnings | ||||||
Number of antidilutive options (in shares) | 480 | 246 | 485 | 216 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Income (Loss) - Accumulated Other Comprehensive Income, Changes In (Details) - USD ($) | Jan. 01, 2019 | Jan. 01, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
AOCI Attributable to Parent, Net of Tax | |||||||
Beginning balance, net of tax | $ 731,291,000 | $ 754,140,000 | $ 758,033,000 | $ 746,396,000 | $ 731,291,000 | $ 754,140,000 | |
Cumulative effect of accounting change | (16,452,000) | 0 | |||||
Adjusted beginning balance, net of tax | 714,839,000 | 754,140,000 | |||||
Income tax (expense) benefit | (5,505,000) | 1,423,000 | (14,664,000) | 5,611,000 | |||
Ending balance, net of tax | 787,765,000 | 751,810,000 | 787,765,000 | 751,810,000 | |||
Retained Earnings | |||||||
AOCI Attributable to Parent, Net of Tax | |||||||
Beginning balance, net of tax | 64,797,000 | 32,851,000 | 57,023,000 | 39,184,000 | 64,797,000 | 32,851,000 | |
Cumulative effect of accounting change | (16,452,000) | (85,000) | |||||
Adjusted beginning balance, net of tax | 48,345,000 | 32,766,000 | |||||
Ending balance, net of tax | 65,183,000 | 48,843,000 | 65,183,000 | 48,843,000 | |||
Unrealized Gains (Losses) on Securities | |||||||
AOCI Attributable to Parent, Net of Tax | |||||||
Beginning balance, net of tax | (31,120,000) | (16,295,000) | 5,901,000 | (35,594,000) | (31,120,000) | (16,295,000) | |
Adjusted beginning balance, net of tax | (16,210,000) | ||||||
Other comprehensive income (loss) before reclassifications | 32,196,000 | (10,371,000) | 78,822,000 | (35,872,000) | |||
Reclassification adjustments included in net income | (336,000) | 1,584,000 | (101,000) | 2,549,000 | |||
Income tax (expense) benefit | (6,691,000) | 1,845,000 | (16,531,000) | 6,997,000 | |||
Net current-period other comprehensive income (loss), net of tax | 25,169,000 | (6,942,000) | 62,190,000 | (26,326,000) | |||
Ending balance, net of tax | 31,070,000 | (42,536,000) | 31,070,000 | (42,536,000) | |||
Unrealized Gains (Losses) on Derivatives | |||||||
AOCI Attributable to Parent, Net of Tax | |||||||
Beginning balance, net of tax | 7,146,000 | 6,399,000 | 4,153,000 | 9,652,000 | 7,146,000 | 6,399,000 | |
Adjusted beginning balance, net of tax | 6,399,000 | ||||||
Other comprehensive income (loss) before reclassifications | (5,653,000) | 1,725,000 | (8,773,000) | 5,970,000 | |||
Reclassification adjustments included in net income | (642,000) | (331,000) | (1,310,000) | (458,000) | |||
Income tax (expense) benefit | 1,322,000 | (293,000) | 2,117,000 | (1,158,000) | |||
Net current-period other comprehensive income (loss), net of tax | (4,973,000) | 1,101,000 | (7,966,000) | 4,354,000 | |||
Ending balance, net of tax | (820,000) | 10,753,000 | (820,000) | 10,753,000 | |||
Net Prior Service (Cost) Credit | |||||||
AOCI Attributable to Parent, Net of Tax | |||||||
Reclassification adjustments included in net income | [1] | (3,000) | (2,000) | (4,000) | (4,000) | ||
Net Gain (Loss) | |||||||
AOCI Attributable to Parent, Net of Tax | |||||||
Reclassification adjustments included in net income | [1] | 651,000 | 620,000 | 1,193,000 | 1,095,000 | ||
Total | |||||||
AOCI Attributable to Parent, Net of Tax | |||||||
Beginning balance, net of tax | (50,228,000) | (36,298,000) | (15,773,000) | (51,970,000) | (50,228,000) | (36,298,000) | |
Cumulative effect of accounting change | 85,000 | ||||||
Adjusted beginning balance, net of tax | (50,228,000) | (36,213,000) | |||||
Other comprehensive income (loss) before reclassifications | 26,543,000 | (8,646,000) | 70,049,000 | (29,902,000) | |||
Reclassification adjustments included in net income | (330,000) | 1,871,000 | (222,000) | 3,182,000 | |||
Income tax (expense) benefit | (5,505,000) | 1,423,000 | (14,664,000) | 5,611,000 | |||
Net current-period other comprehensive income (loss), net of tax | 20,708,000 | (5,352,000) | 55,163,000 | (21,109,000) | |||
Ending balance, net of tax | 4,935,000 | (57,322,000) | 4,935,000 | (57,322,000) | |||
Accounting Standards Update 2016-01 | Retained Earnings | |||||||
AOCI Attributable to Parent, Net of Tax | |||||||
Cumulative effect of accounting change | (85,000) | ||||||
Cumulative Effect on Retained Earnings, before Tax | (107,000) | ||||||
Accounting Standards Update 2016-01 | Unrealized Gains (Losses) on Securities | |||||||
AOCI Attributable to Parent, Net of Tax | |||||||
Cumulative effect of accounting change | [2] | 85,000 | |||||
Accounting Standards Update 2016-01 | Unrealized Gains (Losses) on Derivatives | |||||||
AOCI Attributable to Parent, Net of Tax | |||||||
Cumulative effect of accounting change | 0 | ||||||
Accounting Standards Update 2016-01 | Total | |||||||
AOCI Attributable to Parent, Net of Tax | |||||||
Cumulative effect of accounting change | [2] | 85,000 | |||||
Defined Benefit Pension Plan | Net Prior Service (Cost) Credit | |||||||
AOCI Attributable to Parent, Net of Tax | |||||||
Beginning balance, net of tax | (139,000) | (133,000) | (140,000) | (134,000) | (139,000) | (133,000) | |
Adjusted beginning balance, net of tax | (133,000) | ||||||
Other comprehensive income (loss) before reclassifications | 0 | 0 | 0 | 0 | |||
Reclassification adjustments included in net income | (3,000) | (2,000) | (4,000) | (4,000) | |||
Income tax (expense) benefit | 1,000 | 1,000 | 1,000 | 2,000 | |||
Net current-period other comprehensive income (loss), net of tax | (2,000) | (1,000) | (3,000) | (2,000) | |||
Ending balance, net of tax | (142,000) | (135,000) | (142,000) | (135,000) | |||
Defined Benefit Pension Plan | Net Gain (Loss) | |||||||
AOCI Attributable to Parent, Net of Tax | |||||||
Beginning balance, net of tax | $ (26,115,000) | (26,269,000) | (25,687,000) | (25,894,000) | (26,115,000) | (26,269,000) | |
Adjusted beginning balance, net of tax | (26,269,000) | ||||||
Other comprehensive income (loss) before reclassifications | 0 | 0 | 0 | 0 | |||
Reclassification adjustments included in net income | 651,000 | 620,000 | 1,193,000 | 1,095,000 | |||
Income tax (expense) benefit | (137,000) | (130,000) | (251,000) | (230,000) | |||
Net current-period other comprehensive income (loss), net of tax | 514,000 | 490,000 | 942,000 | 865,000 | |||
Ending balance, net of tax | $ (25,173,000) | $ (25,404,000) | $ (25,173,000) | $ (25,404,000) | |||
Defined Benefit Pension Plan | Accounting Standards Update 2016-01 | Net Prior Service (Cost) Credit | |||||||
AOCI Attributable to Parent, Net of Tax | |||||||
Cumulative effect of accounting change | 0 | ||||||
Defined Benefit Pension Plan | Accounting Standards Update 2016-01 | Net Gain (Loss) | |||||||
AOCI Attributable to Parent, Net of Tax | |||||||
Cumulative effect of accounting change | $ 0 | ||||||
[1] | These accumulated other comprehensive income components are included in the computation of net periodic pension cost (income) presented in “Note 9 - Employee Benefit Plans.” | ||||||
[2] | The Company adopted ASU 2016-01 on January 1, 2018. This amount includes a reclassification for the cumulative adjustment to retained earnings of $107,000 ( $85,000 , net of tax). |
Accumulated Other Comprehensi_4
Accumulated Other Comprehensive Income (Loss) - Reclassifications out of Accumulated Other Comprehensive Income (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | ||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||||
Amortization of unrealized losses | $ 80 | $ 1,252 | $ 571 | $ 1,390 | |
Tax benefit (expense) | (3,569) | (3,360) | (6,706) | (5,450) | |
Total reclassifications for the period, net of tax | 262 | (1,479) | 176 | (2,515) | |
Unrealized gains (losses) | |||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||||
Reclassified from accumulated other comprehensive income | 336 | (1,584) | 101 | (2,549) | |
Realized net loss on interest rate swap derivatives | |||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||||
Reclassified from accumulated other comprehensive income | 642 | 331 | 1,310 | 458 | |
Net actuarial loss | |||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||||
Reclassified from accumulated other comprehensive income | [1] | (651) | (620) | (1,193) | (1,095) |
Prior service credit | |||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||||
Reclassified from accumulated other comprehensive income | [1] | 3 | 2 | 4 | 4 |
Amortization of pension plan | |||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||||
Reclassified from accumulated other comprehensive income | (648) | (618) | (1,189) | (1,091) | |
Tax benefit | 136 | 129 | 250 | 228 | |
Total reclassifications for the period, net of tax | (512) | (489) | (939) | (863) | |
Unrealized losses on securities transferred from held to maturity to available for sale: | Reclassification out of accumulated other comprehensive income | Unrealized gains (losses) | |||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||||
Amortization of unrealized losses | [2] | (80) | (1,252) | (571) | (1,390) |
Tax benefit (expense) | 17 | 263 | 120 | 292 | |
Net of tax | (63) | (989) | (451) | (1,098) | |
Unrealized gains and losses on available for sale securities | Reclassification out of accumulated other comprehensive income | Unrealized gains (losses) | |||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||||
Tax benefit (expense) | (87) | 70 | (141) | 243 | |
Net of tax | 329 | (262) | 531 | (916) | |
Realized net (loss) gain on sale of securities | [3] | 416 | (332) | 672 | (1,159) |
Interest rate swap derivatives | Reclassification out of accumulated other comprehensive income | Realized net loss on interest rate swap derivatives | |||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||||
Tax benefit (expense) | (130) | (65) | (266) | (87) | |
Net of tax | 491 | 244 | 1,001 | 328 | |
Realized net gain (loss) on interest rate swap derivatives | [4] | 621 | 309 | 1,267 | 415 |
Interest rate swap derivatives | Reclassification out of accumulated other comprehensive income | Amortization of unrealized gains on terminated interest rate swap derivatives | |||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||||
Tax benefit (expense) | (4) | (5) | (9) | (9) | |
Net of tax | 17 | 17 | 34 | 34 | |
Realized net gain (loss) on interest rate swap derivatives | [4] | $ 21 | $ 22 | $ 43 | $ 43 |
[1] | These accumulated other comprehensive income components are included in the computation of net periodic pension cost (income) presented in “Note 9 - Employee Benefit Plans.” | ||||
[2] | Included in interest income on the consolidated statements of income. | ||||
[3] | Listed as net gain (loss) on sale of securities available for sale on the consolidated statements of income. | ||||
[4] | Included in interest expense for Federal Home Loan Bank of Dallas (“FHLB”) borrowings on the consolidated statements of income. |
Securities - Schedule of Debt
Securities - Schedule of Debt Securities Components (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 | |
AVAILABLE FOR SALE | |||
Amortized Cost | $ 2,045,507 | $ 2,013,485 | |
Gross unrealized gains | 44,665 | 10,554 | |
Gross unrealized losses | 1,385 | 34,603 | |
Estimated fair value | 2,088,787 | 1,989,436 | |
HELD TO MATURITY | |||
Amortized cost | 147,091 | 162,931 | |
Gross unrealized gains | 4,516 | 360 | |
Gross unrealized losses | 300 | 3,510 | |
Estimated Fair Value | 151,307 | 159,781 | |
State and political subdivisions | |||
AVAILABLE FOR SALE | |||
Amortized Cost | 512,575 | 728,142 | |
Gross unrealized gains | 16,758 | 6,115 | |
Gross unrealized losses | 478 | 17,656 | |
Estimated fair value | 528,855 | 716,601 | |
HELD TO MATURITY | |||
Amortized cost | 3,018 | 3,083 | |
Gross unrealized gains | 36 | 5 | |
Gross unrealized losses | 0 | 42 | |
Estimated Fair Value | 3,054 | 3,046 | |
Other stocks and bonds | |||
AVAILABLE FOR SALE | |||
Amortized Cost | 3,000 | 3,000 | |
Gross unrealized gains | 0 | 0 | |
Gross unrealized losses | 41 | 291 | |
Estimated fair value | 2,959 | 2,709 | |
Residential | |||
AVAILABLE FOR SALE | |||
Amortized Cost | [1] | 1,296,888 | 738,585 |
Gross unrealized gains | [1] | 22,944 | 3,498 |
Gross unrealized losses | [1] | 846 | 9,111 |
Estimated fair value | [1] | 1,318,986 | 732,972 |
HELD TO MATURITY | |||
Amortized cost | [1] | 59,756 | 59,655 |
Gross unrealized gains | [1] | 2,496 | 154 |
Gross unrealized losses | [1] | 144 | 1,140 |
Estimated Fair Value | [1] | 62,108 | 58,669 |
Commercial | |||
AVAILABLE FOR SALE | |||
Amortized Cost | [1] | 233,044 | 543,758 |
Gross unrealized gains | [1] | 4,963 | 941 |
Gross unrealized losses | [1] | 20 | 7,545 |
Estimated fair value | [1] | 237,987 | 537,154 |
HELD TO MATURITY | |||
Amortized cost | [1] | 84,317 | 100,193 |
Gross unrealized gains | [1] | 1,984 | 201 |
Gross unrealized losses | [1] | 156 | 2,328 |
Estimated Fair Value | [1] | $ 86,145 | $ 98,066 |
[1] | All mortgage-backed securities issued and/or guaranteed by U.S. government agencies or U.S. government-sponsored enterprises. |
Securities - Unrealized Loss o
Securities - Unrealized Loss on Securities (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Available-for-sale, Unrealized Loss Position [Abstract] | ||
Less than 12 Months, fair value | $ 5,869 | $ 115,902 |
More than 12 Months, fair value | 134,769 | 1,345,243 |
Total fair value | 140,638 | 1,461,145 |
Available-for-sale, Unrealized Loss Position, Accumulated Loss [Abstract] | ||
Less than 12 Months, unrealized loss | 53 | 1,247 |
More than 12 Months, unrealized Loss | 1,332 | 33,356 |
Total unrealized loss | 1,385 | 34,603 |
Held-to-maturity, Continuous Unrealized Loss Position, Fair Value [Abstract] | ||
Less than 12 months, fair value | 0 | 5,460 |
More than 12 Months, fair value | 17,280 | 142,236 |
Total fair value | 17,280 | 147,696 |
Held-to-maturity Securities, Continuous Unrealized Loss Position, Accumulated Losses [Abstract] | ||
Less than 12 months, unrealized loss | 0 | 63 |
More than 12 months, unrealized loss | 300 | 3,447 |
Total unrealized loss | 300 | 3,510 |
State and political subdivisions | ||
Available-for-sale, Unrealized Loss Position [Abstract] | ||
Less than 12 Months, fair value | 2,281 | 98,112 |
More than 12 Months, fair value | 28,087 | 399,205 |
Total fair value | 30,368 | 497,317 |
Available-for-sale, Unrealized Loss Position, Accumulated Loss [Abstract] | ||
Less than 12 Months, unrealized loss | 10 | 899 |
More than 12 Months, unrealized Loss | 468 | 16,757 |
Total unrealized loss | 478 | 17,656 |
Held-to-maturity, Continuous Unrealized Loss Position, Fair Value [Abstract] | ||
Less than 12 months, fair value | 235 | |
More than 12 Months, fair value | 2,022 | |
Total fair value | 2,257 | |
Held-to-maturity Securities, Continuous Unrealized Loss Position, Accumulated Losses [Abstract] | ||
Less than 12 months, unrealized loss | 1 | |
More than 12 months, unrealized loss | 41 | |
Total unrealized loss | 42 | |
Other stocks and bonds | ||
Available-for-sale, Unrealized Loss Position [Abstract] | ||
Less than 12 Months, fair value | 2,959 | 2,709 |
More than 12 Months, fair value | 0 | 0 |
Total fair value | 2,959 | 2,709 |
Available-for-sale, Unrealized Loss Position, Accumulated Loss [Abstract] | ||
Less than 12 Months, unrealized loss | 41 | 291 |
More than 12 Months, unrealized Loss | 0 | 0 |
Total unrealized loss | 41 | 291 |
Residential | ||
Available-for-sale, Unrealized Loss Position [Abstract] | ||
Less than 12 Months, fair value | 629 | 5,552 |
More than 12 Months, fair value | 91,649 | 488,334 |
Total fair value | 92,278 | 493,886 |
Available-for-sale, Unrealized Loss Position, Accumulated Loss [Abstract] | ||
Less than 12 Months, unrealized loss | 2 | 27 |
More than 12 Months, unrealized Loss | 844 | 9,084 |
Total unrealized loss | 846 | 9,111 |
Held-to-maturity, Continuous Unrealized Loss Position, Fair Value [Abstract] | ||
Less than 12 months, fair value | 0 | 4,826 |
More than 12 Months, fair value | 2,579 | 51,046 |
Total fair value | 2,579 | 55,872 |
Held-to-maturity Securities, Continuous Unrealized Loss Position, Accumulated Losses [Abstract] | ||
Less than 12 months, unrealized loss | 0 | 60 |
More than 12 months, unrealized loss | 144 | 1,080 |
Total unrealized loss | 144 | 1,140 |
Commercial | ||
Available-for-sale, Unrealized Loss Position [Abstract] | ||
Less than 12 Months, fair value | 0 | 9,529 |
More than 12 Months, fair value | 15,033 | 457,704 |
Total fair value | 15,033 | 467,233 |
Available-for-sale, Unrealized Loss Position, Accumulated Loss [Abstract] | ||
Less than 12 Months, unrealized loss | 0 | 30 |
More than 12 Months, unrealized Loss | 20 | 7,515 |
Total unrealized loss | 20 | 7,545 |
Held-to-maturity, Continuous Unrealized Loss Position, Fair Value [Abstract] | ||
Less than 12 months, fair value | 0 | 399 |
More than 12 Months, fair value | 14,701 | 89,168 |
Total fair value | 14,701 | 89,567 |
Held-to-maturity Securities, Continuous Unrealized Loss Position, Accumulated Losses [Abstract] | ||
Less than 12 months, unrealized loss | 0 | 2 |
More than 12 months, unrealized loss | 156 | 2,326 |
Total unrealized loss | $ 156 | $ 2,328 |
Securities - Interest Income o
Securities - Interest Income on Securities (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Investments, Debt Securities [Abstract] | ||||
U.S. Treasury | $ 0 | $ 23 | $ 0 | $ 131 |
U.S. government agency debentures | 0 | 89 | ||
State and political subdivisions | 3,527 | 6,353 | 7,645 | 12,734 |
Other stocks and bonds | 27 | 28 | 55 | 58 |
Mortgage-backed securities | 13,246 | 10,210 | 25,720 | 21,104 |
Total interest income on securities | $ 16,800 | $ 16,614 | $ 33,420 | $ 34,116 |
Securities - Amortized Cost an
Securities - Amortized Cost and Estimated Fair Value of Investments in Debt Securities by Contractual Maturity (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Available for sale, Amortized Cost | ||
Due in one year or less | $ 3,349 | |
Due after one year through five years | 8,406 | |
Due after five years through ten years | 28,488 | |
Due after ten years | 475,332 | |
Total available-for-sale investment securities | 515,575 | |
Mortgage-backed securities | 1,529,932 | |
Amortized Cost | 2,045,507 | $ 2,013,485 |
Available for sale, Fair Value | ||
Due in one year or less | 3,363 | |
Due after one year through five years | 8,469 | |
Due after five years through ten years | 29,573 | |
Due after ten years | 490,409 | |
Total available-for-sale investment securities | 531,814 | |
Mortgage-backed securities | 1,556,973 | |
Total | 2,088,787 | 1,989,436 |
Held to maturity, Amortized Cost | ||
Due in one year or less | 115 | |
Due after one year through five years | 1,658 | |
Due after five years through ten years | 1,245 | |
Due after ten years | 0 | |
Total held-to-maturity investment securities | 3,018 | |
Mortgage-backed securities | 144,073 | |
Amortized cost | 147,091 | 162,931 |
Held to maturity, Fair Value | ||
Due in one year or less | 115 | |
Due after one year through five years | 1,675 | |
Due after five years through ten years | 1,264 | |
Due after ten years | 0 | |
Total held-to-maturity investment securities | 3,054 | |
Mortgage-backed securities | 148,253 | |
Total | $ 151,307 | $ 159,781 |
Securities - Unrealized and Re
Securities - Unrealized and Realized Gain (Loss) Recognized in Net Income on Equity Investments (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Gain (Loss) on Securities [Line Items] | ||||
Net gains (losses) recognized during the period on equity investments | $ 87 | $ (42) | $ 163 | $ (134) |
Less: Net gains (losses) recognized during the period on equity investments sold during the period | 0 | 0 | 0 | 0 |
Unrealized gains (losses) recognized during the reporting period on equity investments still held at the reporting date | $ 87 | $ (42) | $ 163 | $ (134) |
Securities - Narrative (Detail
Securities - Narrative (Details) | Jan. 01, 2019USD ($) | Jun. 30, 2019USD ($) | Jun. 30, 2018USD ($) | Dec. 31, 2018USD ($) |
Investment [Line Items] | ||||
Transferred Securities, Unrealized Loss, Before Tax | $ 4,000,000 | $ 15,300,000 | ||
Securities transferred, Unrealized Loss, Net of Tax | 3,100,000 | 12,100,000 | ||
Fair value of securities transferred from AFS to HTM | $ 0 | 0 | ||
AFS securities and HTM securities with other-than-temporary impairment | 0 | |||
Available-for-sale Securities, Gross Realized Gain (Loss) [Abstract] | ||||
Net realized gain (loss) on AFS securities | $ 672,000 | $ (1,200,000) | ||
Gross realized gains on AFS securities | 5,500,000 | 1,500,000 | ||
Gross realized losses on AFS securities | 4,900,000 | 2,700,000 | ||
Carrying value of investment securities pledged as collateral | 949,200,000 | 1,080,000,000 | ||
Equity investments | $ 12,374,000 | $ 12,093,000 | ||
Equity investments with other-than-temporary impairment | 0 | |||
Federal Home Loan Bank stock with other-than-temporary impairment | 0 | |||
Debt Securities, Held-to-maturity, Sale or Transfer of Investment [Abstract] | ||||
Sale of HTM portfolio | $ 0 | $ 0 | ||
Accounting Standards Update 2017-08 | ||||
Investment [Line Items] | ||||
Cumulative effect on Retained Earnings, before tax | $ (16,500,000) |
Loans and Allowance for Proba_3
Loans and Allowance for Probable Loan Losses - Loans by Portfolio Segment (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 | |
Loans and Leases Receivable Disclosure [Abstract] | |||
Total ending loan balance | $ 3,460,143 | $ 3,312,799 | |
Less: Allowance for loan losses | [1] | 24,705 | 27,019 |
Net Loans | 3,435,438 | 3,285,780 | |
Construction Real Estate Loans | |||
Loans and Leases Receivable Disclosure [Abstract] | |||
Total ending loan balance | 579,565 | 507,732 | |
1-4 Family Residential Real Estate Loans | |||
Loans and Leases Receivable Disclosure [Abstract] | |||
Total ending loan balance | 782,073 | 794,499 | |
Commercial Real Estate Loans | |||
Loans and Leases Receivable Disclosure [Abstract] | |||
Total ending loan balance | 1,251,248 | 1,194,118 | |
Commercial loans | |||
Loans and Leases Receivable Disclosure [Abstract] | |||
Total ending loan balance | 389,521 | 356,649 | |
Municipal loans | |||
Loans and Leases Receivable Disclosure [Abstract] | |||
Total ending loan balance | 357,028 | 353,370 | |
Loans to individuals | |||
Loans and Leases Receivable Disclosure [Abstract] | |||
Total ending loan balance | 100,708 | 106,431 | |
Purchase Credit Impaired (PCI) Loans | |||
Loans and Leases Receivable Disclosure [Abstract] | |||
Less: Allowance for loan losses | [1] | $ 139 | $ 302 |
[1] | The allowance for loan losses recorded on purchased credit impaired (“PCI”) loans totaled $139,000 and $302,000 as of June 30, 2019 and December 31, 2018 , respectively. |
Loans and Allowance for Proba_4
Loans and Allowance for Probable Loan Losses - Allowance for Loan Losses Activity by Portfolio Segment (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |||
Allowances for Loan Losses [Roll Forward] | ||||||
Balance at beginning of period | $ 24,155 | $ 24,220 | $ 27,019 | $ 20,781 | [1] | |
Provision (reversal) for loan losses | [2] | 2,506 | 1,281 | 1,588 | 5,016 | |
Loans charged off | (2,397) | (917) | (4,682) | (1,684) | ||
Recoveries of loans charged off | 441 | 488 | 780 | 959 | ||
Balance at end of period | 24,705 | 25,072 | 24,705 | 25,072 | ||
Provision (reversal) for PCI Loans | (111) | 358 | (163) | 358 | ||
Construction Real Estate Loans | ||||||
Allowances for Loan Losses [Roll Forward] | ||||||
Balance at beginning of period | 4,259 | 3,597 | 3,597 | 3,676 | [1] | |
Provision (reversal) for loan losses | (660) | 244 | 2 | 179 | ||
Loans charged off | 0 | 0 | 0 | (14) | ||
Recoveries of loans charged off | 0 | 0 | 0 | 0 | ||
Balance at end of period | 3,599 | 3,841 | 3,599 | 3,841 | ||
1-4 Family Residential Real Estate Loans | ||||||
Allowances for Loan Losses [Roll Forward] | ||||||
Balance at beginning of period | 3,382 | 2,377 | 3,844 | 2,445 | [1] | |
Provision (reversal) for loan losses | 137 | 403 | (310) | 321 | ||
Loans charged off | 0 | (57) | (18) | (57) | ||
Recoveries of loans charged off | 3 | 7 | 6 | 21 | ||
Balance at end of period | 3,522 | 2,730 | 3,522 | 2,730 | ||
Commercial Real Estate Loans | ||||||
Allowances for Loan Losses [Roll Forward] | ||||||
Balance at beginning of period | 10,660 | 14,089 | 13,968 | 10,821 | [1] | |
Provision (reversal) for loan losses | 1,516 | (57) | (596) | 3,209 | ||
Loans charged off | (1,661) | 0 | (2,876) | 0 | ||
Recoveries of loans charged off | 19 | 4 | 38 | 6 | ||
Balance at end of period | 10,534 | 14,036 | 10,534 | 14,036 | ||
Commercial loans | ||||||
Allowances for Loan Losses [Roll Forward] | ||||||
Balance at beginning of period | 4,287 | 2,385 | 3,974 | 2,094 | [1] | |
Provision (reversal) for loan losses | 1,266 | 328 | 2,000 | 661 | ||
Loans charged off | (130) | (172) | (581) | (257) | ||
Recoveries of loans charged off | 123 | 19 | 153 | 62 | ||
Balance at end of period | 5,546 | 2,560 | 5,546 | 2,560 | ||
Municipal loans | ||||||
Allowances for Loan Losses [Roll Forward] | ||||||
Balance at beginning of period | 508 | 851 | 525 | 860 | [1] | |
Provision (reversal) for loan losses | 22 | 8 | 5 | (1) | ||
Loans charged off | 0 | 0 | 0 | 0 | ||
Recoveries of loans charged off | 0 | 0 | 0 | 0 | ||
Balance at end of period | 530 | 859 | 530 | 859 | ||
Loans to individuals | ||||||
Allowances for Loan Losses [Roll Forward] | ||||||
Balance at beginning of period | 1,059 | 921 | 1,111 | 885 | [1] | |
Provision (reversal) for loan losses | 225 | 355 | 487 | 647 | ||
Loans charged off | (606) | (688) | (1,207) | (1,356) | ||
Recoveries of loans charged off | 296 | 458 | 583 | 870 | ||
Balance at end of period | $ 974 | $ 1,046 | $ 974 | $ 1,046 | ||
[1] | Loans acquired with the Diboll acquisition were measured at fair value on November 30, 2017 with no carryover of allowance for loan losses. | |||||
[2] | Of the $2.5 million and $1.6 million provision for loan losses for the three and six months ended June 30, 2019 , $111,000 and $163,000 related to provision expense reversed on PCI loans, respectively. Of the $1.3 million and $5.0 million recorded in provision for loan losses for the three and six months ended June 30, 2018 , $358,000 related to provision expense on PCI loans. |
Loans and Allowance for Proba_5
Loans and Allowance for Probable Loan Losses - Allowance Balance, by Impairment Method (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | [2] | |
Schedule of Allowance For Loan Losses, Allowance Balance, by Impairment Method [Line Items] | ||||||||
Ending balance - individually evaluated for impairment | [1] | $ 2,369 | $ 5,908 | |||||
Ending balance - collectively evaluated for impairment | 22,336 | 21,111 | ||||||
Balance at end of period | 24,705 | $ 24,155 | 27,019 | $ 25,072 | $ 24,220 | $ 20,781 | ||
Loans and Leases Receivable, Allowance | [3] | 24,705 | 27,019 | |||||
Construction Real Estate Loans | ||||||||
Schedule of Allowance For Loan Losses, Allowance Balance, by Impairment Method [Line Items] | ||||||||
Ending balance - individually evaluated for impairment | [1] | 23 | 13 | |||||
Ending balance - collectively evaluated for impairment | 3,576 | 3,584 | ||||||
Balance at end of period | 3,599 | 4,259 | 3,597 | 3,841 | 3,597 | 3,676 | ||
1-4 Family Residential Real Estate Loans | ||||||||
Schedule of Allowance For Loan Losses, Allowance Balance, by Impairment Method [Line Items] | ||||||||
Ending balance - individually evaluated for impairment | [1] | 66 | 40 | |||||
Ending balance - collectively evaluated for impairment | 3,456 | 3,804 | ||||||
Balance at end of period | 3,522 | 3,382 | 3,844 | 2,730 | 2,377 | 2,445 | ||
Commercial Real Estate Loans | ||||||||
Schedule of Allowance For Loan Losses, Allowance Balance, by Impairment Method [Line Items] | ||||||||
Ending balance - individually evaluated for impairment | [1] | 1,408 | 5,337 | |||||
Ending balance - collectively evaluated for impairment | 9,126 | 8,631 | ||||||
Balance at end of period | 10,534 | 10,660 | 13,968 | 14,036 | 14,089 | 10,821 | ||
Commercial loans | ||||||||
Schedule of Allowance For Loan Losses, Allowance Balance, by Impairment Method [Line Items] | ||||||||
Ending balance - individually evaluated for impairment | [1] | 782 | 368 | |||||
Ending balance - collectively evaluated for impairment | 4,764 | 3,606 | ||||||
Balance at end of period | 5,546 | 4,287 | 3,974 | 2,560 | 2,385 | 2,094 | ||
Municipal loans | ||||||||
Schedule of Allowance For Loan Losses, Allowance Balance, by Impairment Method [Line Items] | ||||||||
Ending balance - individually evaluated for impairment | [1] | 0 | 1 | |||||
Ending balance - collectively evaluated for impairment | 530 | 524 | ||||||
Balance at end of period | 530 | 508 | 525 | 859 | 851 | 860 | ||
Loans to individuals | ||||||||
Schedule of Allowance For Loan Losses, Allowance Balance, by Impairment Method [Line Items] | ||||||||
Ending balance - individually evaluated for impairment | [1] | 90 | 149 | |||||
Ending balance - collectively evaluated for impairment | 884 | 962 | ||||||
Balance at end of period | 974 | $ 1,059 | 1,111 | $ 1,046 | $ 921 | $ 885 | ||
Financial Asset Acquired with Credit Deterioration [Member] | ||||||||
Schedule of Allowance For Loan Losses, Allowance Balance, by Impairment Method [Line Items] | ||||||||
Loans and Leases Receivable, Allowance | [3] | $ 139 | $ 302 | |||||
[1] | The allowance for loan losses on PCI loans totaled $139,000 and $302,000 as of June 30, 2019 and December 31, 2018 , respectively. | |||||||
[2] | Loans acquired with the Diboll acquisition were measured at fair value on November 30, 2017 with no carryover of allowance for loan losses. | |||||||
[3] | The allowance for loan losses recorded on purchased credit impaired (“PCI”) loans totaled $139,000 and $302,000 as of June 30, 2019 and December 31, 2018 , respectively. |
Loans and Allowance for Proba_6
Loans and Allowance for Probable Loan Losses - Allowance for Loan Losses, Loan Portfolio, by Impairment Method (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Schedule of Allowance For Loan Losses, Loan Balance, by Impairment Method [Line Items] | ||
Loans individually evaluated for impairment | $ 25,917 | $ 36,247 |
Loans collectively evaluated for impairment | 3,393,125 | 3,230,150 |
Purchased credit impaired loans | 41,101 | 46,402 |
Total ending loan balance | 3,460,143 | 3,312,799 |
Construction Real Estate Loans | ||
Schedule of Allowance For Loan Losses, Loan Balance, by Impairment Method [Line Items] | ||
Loans individually evaluated for impairment | 200 | 12 |
Loans collectively evaluated for impairment | 579,226 | 507,564 |
Purchased credit impaired loans | 139 | 156 |
Total ending loan balance | 579,565 | 507,732 |
1-4 Family Residential Real Estate Loans | ||
Schedule of Allowance For Loan Losses, Loan Balance, by Impairment Method [Line Items] | ||
Loans individually evaluated for impairment | 1,268 | 1,215 |
Loans collectively evaluated for impairment | 772,725 | 782,614 |
Purchased credit impaired loans | 8,080 | 10,670 |
Total ending loan balance | 782,073 | 794,499 |
Commercial Real Estate Loans | ||
Schedule of Allowance For Loan Losses, Loan Balance, by Impairment Method [Line Items] | ||
Loans individually evaluated for impairment | 21,361 | 33,013 |
Loans collectively evaluated for impairment | 1,198,899 | 1,128,220 |
Purchased credit impaired loans | 30,988 | 32,885 |
Total ending loan balance | 1,251,248 | 1,194,118 |
Commercial loans | ||
Schedule of Allowance For Loan Losses, Loan Balance, by Impairment Method [Line Items] | ||
Loans individually evaluated for impairment | 2,523 | 1,394 |
Loans collectively evaluated for impairment | 385,322 | 353,036 |
Purchased credit impaired loans | 1,676 | 2,219 |
Total ending loan balance | 389,521 | 356,649 |
Municipal loans | ||
Schedule of Allowance For Loan Losses, Loan Balance, by Impairment Method [Line Items] | ||
Loans individually evaluated for impairment | 429 | 429 |
Loans collectively evaluated for impairment | 356,599 | 352,941 |
Purchased credit impaired loans | 0 | 0 |
Total ending loan balance | 357,028 | 353,370 |
Loans to individuals | ||
Schedule of Allowance For Loan Losses, Loan Balance, by Impairment Method [Line Items] | ||
Loans individually evaluated for impairment | 136 | 184 |
Loans collectively evaluated for impairment | 100,354 | 105,775 |
Purchased credit impaired loans | 218 | 472 |
Total ending loan balance | $ 100,708 | $ 106,431 |
Loans and Allowance for Proba_7
Loans and Allowance for Probable Loan Losses - Loans by Credit Quality Indicator (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 | |
Financing Receivable, Recorded Investment, Credit Quality Indicator [Abstract] | |||
Loans | $ 3,460,143 | $ 3,312,799 | |
Purchased credit impaired loans | 41,101 | 46,402 | |
Pass | |||
Financing Receivable, Recorded Investment, Credit Quality Indicator [Abstract] | |||
Loans | 3,338,996 | 3,171,320 | |
Pass Watch | |||
Financing Receivable, Recorded Investment, Credit Quality Indicator [Abstract] | |||
Loans | [1] | 58,648 | 12,203 |
Purchased credit impaired loans | 15 | 22 | |
Special Mention | |||
Financing Receivable, Recorded Investment, Credit Quality Indicator [Abstract] | |||
Loans | [1] | 13,673 | 29,783 |
Purchased credit impaired loans | 217 | 859 | |
Substandard | |||
Financing Receivable, Recorded Investment, Credit Quality Indicator [Abstract] | |||
Loans | [1] | 47,385 | 96,950 |
Purchased credit impaired loans | 2,700 | 3,900 | |
Doubtful | |||
Financing Receivable, Recorded Investment, Credit Quality Indicator [Abstract] | |||
Loans | [1] | 1,441 | 2,543 |
Purchased credit impaired loans | 305 | 1,200 | |
Construction Real Estate Loans | |||
Financing Receivable, Recorded Investment, Credit Quality Indicator [Abstract] | |||
Loans | 579,565 | 507,732 | |
Purchased credit impaired loans | 139 | 156 | |
Construction Real Estate Loans | Pass | |||
Financing Receivable, Recorded Investment, Credit Quality Indicator [Abstract] | |||
Loans | 579,253 | 507,529 | |
Construction Real Estate Loans | Pass Watch | |||
Financing Receivable, Recorded Investment, Credit Quality Indicator [Abstract] | |||
Loans | [1] | 47 | 163 |
Construction Real Estate Loans | Special Mention | |||
Financing Receivable, Recorded Investment, Credit Quality Indicator [Abstract] | |||
Loans | [1] | 0 | 0 |
Construction Real Estate Loans | Substandard | |||
Financing Receivable, Recorded Investment, Credit Quality Indicator [Abstract] | |||
Loans | [1] | 265 | 28 |
Construction Real Estate Loans | Doubtful | |||
Financing Receivable, Recorded Investment, Credit Quality Indicator [Abstract] | |||
Loans | [1] | 0 | 12 |
1-4 Family Residential Real Estate Loans | |||
Financing Receivable, Recorded Investment, Credit Quality Indicator [Abstract] | |||
Loans | 782,073 | 794,499 | |
Purchased credit impaired loans | 8,080 | 10,670 | |
1-4 Family Residential Real Estate Loans | Pass | |||
Financing Receivable, Recorded Investment, Credit Quality Indicator [Abstract] | |||
Loans | 776,375 | 787,516 | |
1-4 Family Residential Real Estate Loans | Pass Watch | |||
Financing Receivable, Recorded Investment, Credit Quality Indicator [Abstract] | |||
Loans | [1] | 31 | 37 |
1-4 Family Residential Real Estate Loans | Special Mention | |||
Financing Receivable, Recorded Investment, Credit Quality Indicator [Abstract] | |||
Loans | [1] | 166 | 100 |
1-4 Family Residential Real Estate Loans | Substandard | |||
Financing Receivable, Recorded Investment, Credit Quality Indicator [Abstract] | |||
Loans | [1] | 4,784 | 5,489 |
1-4 Family Residential Real Estate Loans | Doubtful | |||
Financing Receivable, Recorded Investment, Credit Quality Indicator [Abstract] | |||
Loans | [1] | 717 | 1,357 |
Commercial Real Estate Loans | |||
Financing Receivable, Recorded Investment, Credit Quality Indicator [Abstract] | |||
Loans | 1,251,248 | 1,194,118 | |
Purchased credit impaired loans | 30,988 | 32,885 | |
Commercial Real Estate Loans | Pass | |||
Financing Receivable, Recorded Investment, Credit Quality Indicator [Abstract] | |||
Loans | 1,150,646 | 1,067,874 | |
Commercial Real Estate Loans | Pass Watch | |||
Financing Receivable, Recorded Investment, Credit Quality Indicator [Abstract] | |||
Loans | [1] | 55,208 | 11,479 |
Commercial Real Estate Loans | Special Mention | |||
Financing Receivable, Recorded Investment, Credit Quality Indicator [Abstract] | |||
Loans | [1] | 7,444 | 26,490 |
Commercial Real Estate Loans | Substandard | |||
Financing Receivable, Recorded Investment, Credit Quality Indicator [Abstract] | |||
Loans | [1] | 37,793 | 87,767 |
Commercial Real Estate Loans | Doubtful | |||
Financing Receivable, Recorded Investment, Credit Quality Indicator [Abstract] | |||
Loans | [1] | 157 | 508 |
Commercial loans | |||
Financing Receivable, Recorded Investment, Credit Quality Indicator [Abstract] | |||
Loans | 389,521 | 356,649 | |
Purchased credit impaired loans | 1,676 | 2,219 | |
Commercial loans | Pass | |||
Financing Receivable, Recorded Investment, Credit Quality Indicator [Abstract] | |||
Loans | 375,664 | 349,495 | |
Commercial loans | Pass Watch | |||
Financing Receivable, Recorded Investment, Credit Quality Indicator [Abstract] | |||
Loans | [1] | 3,362 | 520 |
Commercial loans | Special Mention | |||
Financing Receivable, Recorded Investment, Credit Quality Indicator [Abstract] | |||
Loans | [1] | 6,063 | 3,189 |
Commercial loans | Substandard | |||
Financing Receivable, Recorded Investment, Credit Quality Indicator [Abstract] | |||
Loans | [1] | 4,163 | 2,988 |
Commercial loans | Doubtful | |||
Financing Receivable, Recorded Investment, Credit Quality Indicator [Abstract] | |||
Loans | [1] | 269 | 457 |
Municipal loans | |||
Financing Receivable, Recorded Investment, Credit Quality Indicator [Abstract] | |||
Loans | 357,028 | 353,370 | |
Purchased credit impaired loans | 0 | 0 | |
Municipal loans | Pass | |||
Financing Receivable, Recorded Investment, Credit Quality Indicator [Abstract] | |||
Loans | 357,028 | 353,370 | |
Municipal loans | Pass Watch | |||
Financing Receivable, Recorded Investment, Credit Quality Indicator [Abstract] | |||
Loans | [1] | 0 | 0 |
Municipal loans | Special Mention | |||
Financing Receivable, Recorded Investment, Credit Quality Indicator [Abstract] | |||
Loans | [1] | 0 | 0 |
Municipal loans | Substandard | |||
Financing Receivable, Recorded Investment, Credit Quality Indicator [Abstract] | |||
Loans | [1] | 0 | 0 |
Municipal loans | Doubtful | |||
Financing Receivable, Recorded Investment, Credit Quality Indicator [Abstract] | |||
Loans | [1] | 0 | 0 |
Loans to individuals | |||
Financing Receivable, Recorded Investment, Credit Quality Indicator [Abstract] | |||
Loans | 100,708 | 106,431 | |
Purchased credit impaired loans | 218 | 472 | |
Loans to individuals | Pass | |||
Financing Receivable, Recorded Investment, Credit Quality Indicator [Abstract] | |||
Loans | 100,030 | 105,536 | |
Loans to individuals | Pass Watch | |||
Financing Receivable, Recorded Investment, Credit Quality Indicator [Abstract] | |||
Loans | [1] | 0 | 4 |
Loans to individuals | Special Mention | |||
Financing Receivable, Recorded Investment, Credit Quality Indicator [Abstract] | |||
Loans | [1] | 0 | 4 |
Loans to individuals | Substandard | |||
Financing Receivable, Recorded Investment, Credit Quality Indicator [Abstract] | |||
Loans | [1] | 380 | 678 |
Loans to individuals | Doubtful | |||
Financing Receivable, Recorded Investment, Credit Quality Indicator [Abstract] | |||
Loans | [1] | $ 298 | $ 209 |
[1] | Includes PCI loans comprised of $15,000 pass watch, $217,000 special mention, $2.7 million substandard and $305,000 doubtful as of June 30, 2019 . Includes PCI loans comprised of $22,000 pass watch, $859,000 special mention, $3.9 million substandard and $1.2 million doubtful as of December 31, 2018 . |
Loans and Allowance for Proba_8
Loans and Allowance for Probable Loan Losses - Nonperforming Assets by Asset Class (Details) - USD ($) | Jun. 30, 2019 | Dec. 31, 2018 | |
Nonperforming Assets by Asset Class [Abstract] | |||
Nonaccrual loans | [1],[2] | $ 16,376,000 | $ 35,770,000 |
Accruing loans past due more than 90 days | [2] | 0 | 0 |
Restructured loans | [3] | 11,918,000 | 5,930,000 |
Other real estate owned | 1,069,000 | 1,206,000 | |
Repossessed assets | 0 | 0 | |
Total nonperforming assets | 29,363,000 | 42,906,000 | |
Restructured nonaccrual loans | 8,900,000 | 10,900,000 | |
PCI loans restructured | $ 776,000 | $ 3,100,000 | |
[1] | Includes $8.9 million and $10.9 million of restructured loans as of June 30, 2019 and December 31, 2018 , respectively. | ||
[2] | Excludes PCI loans measured at fair value at acquisition if the timing and amount of cash flows expected to be collected from those sales can be reasonably estimated. | ||
[3] | Includes $776,000 and $3.1 million in PCI loans restructured as of June 30, 2019 and December 31, 2018 , respectively. |
Loans and Allowance for Proba_9
Loans and Allowance for Probable Loan Losses - Nonaccrual by Class of Loans (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 | |
Financing Receivable, Past Due [Line Items] | |||
Nonaccrual loans | [1],[2] | $ 16,376 | $ 35,770 |
Construction Real Estate Loans | |||
Financing Receivable, Past Due [Line Items] | |||
Nonaccrual loans | 200 | 12 | |
1-4 Family Residential Real Estate Loans | |||
Financing Receivable, Past Due [Line Items] | |||
Nonaccrual loans | 1,418 | 2,202 | |
Commercial Real Estate Loans | |||
Financing Receivable, Past Due [Line Items] | |||
Nonaccrual loans | 13,383 | 32,599 | |
Commercial loans | |||
Financing Receivable, Past Due [Line Items] | |||
Nonaccrual loans | 1,047 | 639 | |
Loans to individuals | |||
Financing Receivable, Past Due [Line Items] | |||
Nonaccrual loans | $ 328 | $ 318 | |
[1] | Includes $8.9 million and $10.9 million of restructured loans as of June 30, 2019 and December 31, 2018 , respectively. | ||
[2] | Excludes PCI loans measured at fair value at acquisition if the timing and amount of cash flows expected to be collected from those sales can be reasonably estimated. |
Loans and Allowance for Prob_10
Loans and Allowance for Probable Loan Losses - Impaired Loans by Class of Loan (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 | |
Financing Receivable, Impaired [Line Items] | |||
Unpaid Contractual Principal Balance | [1] | $ 40,143 | $ 47,274 |
Recorded Investment | [1] | 35,045 | 44,267 |
Related Allowance for Loan Losses | [1] | 2,369 | 5,908 |
PCI loans that experienced deterioration in credit quality subsequent to acquisition | 9,100 | 8,000 | |
Construction Real Estate Loans | |||
Financing Receivable, Impaired [Line Items] | |||
Unpaid Contractual Principal Balance | 356 | 182 | |
Recorded Investment | 323 | 148 | |
Related Allowance for Loan Losses | 23 | 13 | |
1-4 Family Residential Real Estate Loans | |||
Financing Receivable, Impaired [Line Items] | |||
Unpaid Contractual Principal Balance | 8,646 | 6,507 | |
Recorded Investment | 7,491 | 5,923 | |
Related Allowance for Loan Losses | 66 | 40 | |
Commercial Real Estate Loans | |||
Financing Receivable, Impaired [Line Items] | |||
Unpaid Contractual Principal Balance | 26,198 | 36,457 | |
Recorded Investment | 22,999 | 34,744 | |
Related Allowance for Loan Losses | 1,408 | 5,337 | |
Commercial loans | |||
Financing Receivable, Impaired [Line Items] | |||
Unpaid Contractual Principal Balance | 4,033 | 2,874 | |
Recorded Investment | 3,449 | 2,366 | |
Related Allowance for Loan Losses | 782 | 368 | |
Municipal loans | |||
Financing Receivable, Impaired [Line Items] | |||
Unpaid Contractual Principal Balance | 429 | 429 | |
Recorded Investment | 429 | 429 | |
Related Allowance for Loan Losses | 0 | 1 | |
Loans to individuals | |||
Financing Receivable, Impaired [Line Items] | |||
Unpaid Contractual Principal Balance | 481 | 825 | |
Recorded Investment | 354 | 657 | |
Related Allowance for Loan Losses | $ 90 | $ 149 | |
[1] | Includes $9.1 million and $8.0 million of PCI loans that experienced deterioration in credit quality subsequent to the acquisition date as of June 30, 2019 and December 31, 2018 , respectively. |
Loans and Allowance for Prob_11
Loans and Allowance for Probable Loan Losses - Aging of Past Due Loans by Class of Loan (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 | |
Financing Receivable, Past Due [Line Items] | |||
Total Past Due | $ 10,986 | $ 34,314 | |
Current | [1] | 3,449,157 | 3,278,485 |
Total ending loan balance | 3,460,143 | 3,312,799 | |
30-59 Days Past Due | |||
Financing Receivable, Past Due [Line Items] | |||
Total Past Due | 6,843 | 21,966 | |
60-89 Days Past Due | |||
Financing Receivable, Past Due [Line Items] | |||
Total Past Due | 2,792 | 10,276 | |
Greater than 90 Days Past Due | |||
Financing Receivable, Past Due [Line Items] | |||
Total Past Due | 1,351 | 2,072 | |
Construction Real Estate Loans | |||
Financing Receivable, Past Due [Line Items] | |||
Total Past Due | 812 | 934 | |
Current | [1] | 578,753 | 506,798 |
Total ending loan balance | 579,565 | 507,732 | |
Construction Real Estate Loans | 30-59 Days Past Due | |||
Financing Receivable, Past Due [Line Items] | |||
Total Past Due | 343 | 627 | |
Construction Real Estate Loans | 60-89 Days Past Due | |||
Financing Receivable, Past Due [Line Items] | |||
Total Past Due | 276 | 307 | |
Construction Real Estate Loans | Greater than 90 Days Past Due | |||
Financing Receivable, Past Due [Line Items] | |||
Total Past Due | 193 | 0 | |
1-4 Family Residential Real Estate Loans | |||
Financing Receivable, Past Due [Line Items] | |||
Total Past Due | 3,873 | 10,034 | |
Current | [1] | 778,200 | 784,465 |
Total ending loan balance | 782,073 | 794,499 | |
1-4 Family Residential Real Estate Loans | 30-59 Days Past Due | |||
Financing Receivable, Past Due [Line Items] | |||
Total Past Due | 2,250 | 7,441 | |
1-4 Family Residential Real Estate Loans | 60-89 Days Past Due | |||
Financing Receivable, Past Due [Line Items] | |||
Total Past Due | 1,330 | 1,258 | |
1-4 Family Residential Real Estate Loans | Greater than 90 Days Past Due | |||
Financing Receivable, Past Due [Line Items] | |||
Total Past Due | 293 | 1,335 | |
Commercial Real Estate Loans | |||
Financing Receivable, Past Due [Line Items] | |||
Total Past Due | 2,159 | 18,318 | |
Current | [1] | 1,249,089 | 1,175,800 |
Total ending loan balance | 1,251,248 | 1,194,118 | |
Commercial Real Estate Loans | 30-59 Days Past Due | |||
Financing Receivable, Past Due [Line Items] | |||
Total Past Due | 1,625 | 10,663 | |
Commercial Real Estate Loans | 60-89 Days Past Due | |||
Financing Receivable, Past Due [Line Items] | |||
Total Past Due | 425 | 7,655 | |
Commercial Real Estate Loans | Greater than 90 Days Past Due | |||
Financing Receivable, Past Due [Line Items] | |||
Total Past Due | 109 | 0 | |
Commercial loans | |||
Financing Receivable, Past Due [Line Items] | |||
Total Past Due | 3,256 | 3,242 | |
Current | [1] | 386,265 | 353,407 |
Total ending loan balance | 389,521 | 356,649 | |
Commercial loans | 30-59 Days Past Due | |||
Financing Receivable, Past Due [Line Items] | |||
Total Past Due | 2,070 | 1,946 | |
Commercial loans | 60-89 Days Past Due | |||
Financing Receivable, Past Due [Line Items] | |||
Total Past Due | 567 | 705 | |
Commercial loans | Greater than 90 Days Past Due | |||
Financing Receivable, Past Due [Line Items] | |||
Total Past Due | 619 | 591 | |
Municipal loans | |||
Financing Receivable, Past Due [Line Items] | |||
Total Past Due | 0 | 0 | |
Current | [1] | 357,028 | 353,370 |
Total ending loan balance | 357,028 | 353,370 | |
Municipal loans | 30-59 Days Past Due | |||
Financing Receivable, Past Due [Line Items] | |||
Total Past Due | 0 | 0 | |
Municipal loans | 60-89 Days Past Due | |||
Financing Receivable, Past Due [Line Items] | |||
Total Past Due | 0 | 0 | |
Municipal loans | Greater than 90 Days Past Due | |||
Financing Receivable, Past Due [Line Items] | |||
Total Past Due | 0 | 0 | |
Loans to individuals | |||
Financing Receivable, Past Due [Line Items] | |||
Total Past Due | 886 | 1,786 | |
Current | [1] | 99,822 | 104,645 |
Total ending loan balance | 100,708 | 106,431 | |
Loans to individuals | 30-59 Days Past Due | |||
Financing Receivable, Past Due [Line Items] | |||
Total Past Due | 555 | 1,289 | |
Loans to individuals | 60-89 Days Past Due | |||
Financing Receivable, Past Due [Line Items] | |||
Total Past Due | 194 | 351 | |
Loans to individuals | Greater than 90 Days Past Due | |||
Financing Receivable, Past Due [Line Items] | |||
Total Past Due | $ 137 | $ 146 | |
[1] | Includes PCI loans measured at fair value at acquisition if the timing and amount of cash flows expected to be collected from those sales can be reasonably estimated. |
Loans and Allowance for Prob_12
Loans and Allowance for Probable Loan Losses - Interest Income on Impaired Loans (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Financing Receivable, Impaired [Line Items] | ||||
Average recorded investment | $ 35,761 | $ 38,779 | $ 41,033 | $ 27,277 |
Interest income recognized | 341 | 82 | 759 | 157 |
Construction Real Estate Loans | ||||
Financing Receivable, Impaired [Line Items] | ||||
Average recorded investment | 214 | 140 | 200 | 114 |
Interest income recognized | 5 | 1 | 9 | 1 |
1-4 Family Residential Real Estate Loans | ||||
Financing Receivable, Impaired [Line Items] | ||||
Average recorded investment | 7,533 | 3,955 | 6,271 | 3,945 |
Interest income recognized | 130 | 47 | 210 | 93 |
Commercial Real Estate Loans | ||||
Financing Receivable, Impaired [Line Items] | ||||
Average recorded investment | 24,394 | 31,916 | 30,917 | 20,595 |
Interest income recognized | 153 | 5 | 440 | 9 |
Commercial loans | ||||
Financing Receivable, Impaired [Line Items] | ||||
Average recorded investment | 2,753 | 2,024 | 2,699 | 1,900 |
Interest income recognized | 38 | 19 | 68 | 36 |
Municipal loans | ||||
Financing Receivable, Impaired [Line Items] | ||||
Average recorded investment | 429 | 502 | 429 | 502 |
Interest income recognized | 6 | 7 | 12 | 14 |
Loans to individuals | ||||
Financing Receivable, Impaired [Line Items] | ||||
Average recorded investment | 438 | 242 | 517 | 221 |
Interest income recognized | $ 9 | $ 3 | $ 20 | $ 4 |
Loans and Allowance for Prob_13
Loans and Allowance for Probable Loan Losses - Troubled Debt Restructurings (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019USD ($)contract | Jun. 30, 2018USD ($)contract | Jun. 30, 2019USD ($)contract | Jun. 30, 2018USD ($)contract | |
Financing Receivable, Troubled Debt Restructuring [Line Items] | ||||
Extend Amortization Period | $ 0 | $ 9 | $ 7,650 | $ 238 |
Interest Rate Reductions | 0 | 80 | 0 | 80 |
Combination | 606 | 103 | 731 | 103 |
Total Modifications | $ 606 | $ 192 | $ 8,381 | $ 421 |
Number of Loans | contract | 8 | 6 | 13 | 10 |
1-4 Family Residential Real Estate Loans | ||||
Financing Receivable, Troubled Debt Restructuring [Line Items] | ||||
Extend Amortization Period | $ 0 | $ 0 | $ 0 | $ 0 |
Interest Rate Reductions | 0 | 80 | 0 | 80 |
Combination | 0 | 0 | 111 | 0 |
Total Modifications | $ 0 | $ 80 | $ 111 | $ 80 |
Number of Loans | contract | 0 | 1 | 1 | 1 |
Commercial Real Estate Loans | ||||
Financing Receivable, Troubled Debt Restructuring [Line Items] | ||||
Extend Amortization Period | $ 0 | $ 7,594 | ||
Interest Rate Reductions | 0 | 0 | ||
Combination | 96 | 96 | ||
Total Modifications | $ 96 | $ 7,690 | ||
Number of Loans | contract | 1 | 2 | ||
Commercial loans | ||||
Financing Receivable, Troubled Debt Restructuring [Line Items] | ||||
Extend Amortization Period | $ 0 | $ 0 | $ 56 | $ 132 |
Interest Rate Reductions | 0 | 0 | 0 | 0 |
Combination | 485 | 90 | 485 | 90 |
Total Modifications | $ 485 | $ 90 | $ 541 | $ 222 |
Number of Loans | contract | 4 | 2 | 5 | 5 |
Loans to individuals | ||||
Financing Receivable, Troubled Debt Restructuring [Line Items] | ||||
Extend Amortization Period | $ 0 | $ 9 | $ 0 | $ 106 |
Interest Rate Reductions | 0 | 0 | 0 | 0 |
Combination | 25 | 13 | 39 | 13 |
Total Modifications | $ 25 | $ 22 | $ 39 | $ 119 |
Number of Loans | contract | 3 | 3 | 5 | 4 |
Loans and Allowance for Prob_14
Loans and Allowance for Probable Loan Losses - Purchased Credit Impaired (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2018 | |
Purchased Credit Impaired [Abstract] | |||||
Outstanding principal balance | $ 45,430 | $ 45,430 | $ 51,388 | ||
Carrying amount | 41,101 | 41,101 | $ 46,402 | ||
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities, Accretable Yield Movement Schedule [Roll Forward] | |||||
Balance at beginning of period | 14,520 | $ 15,818 | 15,054 | $ 18,721 | |
Changes in expected cash flows not affecting non-accretable differences | 0 | 0 | 0 | (1,445) | |
Reclassifications (to) from nonaccretable discount | 812 | 1,090 | 1,074 | 770 | |
Accretion | (776) | (803) | (1,572) | (1,941) | |
Balance at end of period | $ 14,556 | $ 16,105 | $ 14,556 | $ 16,105 |
Loans and Allowance for Prob_15
Loans and Allowance for Probable Loan Losses - Narrative (Details) - USD ($) | Jun. 30, 2019 | Dec. 31, 2018 | Jun. 30, 2018 |
Financing Receivable, Allowance for Credit Loss [Line Items] | |||
Loans in process of foreclosure | $ 12,000 | $ 147,000 | |
Commitments to lend additional funds on Troubled Debt Restructurings (TDR) | 0 | $ 0 | |
Impaired loans without an allowance | 0 | $ 0 | |
Minimum | |||
Financing Receivable, Allowance for Credit Loss [Line Items] | |||
Loan review larger dollar loan relationship scope, aggregate debt | 500,000 | ||
Specifically reserved loans or loan relationships threshold | 150,000 | ||
Commercial Real Estate Loans | |||
Financing Receivable, Allowance for Credit Loss [Line Items] | |||
Owner and nonowner-occupied real estate | 1,140,000,000 | ||
Loans secured by multi-family properties | 96,300,000 | ||
Loans secured by farmland | $ 18,100,000 |
Borrowing Arrangements (Details
Borrowing Arrangements (Details) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2019 | Dec. 31, 2018 | ||
Debt Instrument [Line Items] | |||
Other borrowings | $ 26,064 | $ 36,810 | |
Federal Home Loan Bank borrowings | 823,757 | 719,065 | |
Other borrowings: | |||
Debt Instrument [Line Items] | |||
Other borrowings | 26,064 | 36,810 | |
Average amount outstanding during the period | [1] | 15,653 | 10,880 |
Maximum amount outstanding during the period | [2] | $ 28,354 | $ 36,810 |
Weighted average interest rate during the period | [3] | 1.70% | 1.40% |
Interest rate at end of the period | [4] | 2.00% | 2.10% |
Federal Home Loan Bank borrowings: | |||
Debt Instrument [Line Items] | |||
Federal Home Loan Bank borrowings | $ 823,757 | $ 719,065 | |
Average amount outstanding during the period | [1] | 785,901 | 720,785 |
Maximum amount outstanding during the period | [2] | $ 1,004,997 | $ 957,231 |
Weighted average interest rate during the period | [3] | 2.10% | 1.80% |
Interest rate at end of the period | [4] | 2.40% | 2.30% |
[1] | The average amount outstanding during the period was computed by dividing the total daily outstanding principal balances by the number of days in the period. | ||
[2] | The maximum amount outstanding at any month-end during the period. | ||
[3] | The weighted average interest rate during the period was computed by dividing the actual interest expense (annualized for interim periods) by the average amount outstanding during the period. The weighted average interest rate on the FHLB borrowings includes the effect of interest rate swaps. | ||
[4] | Stated rate. |
Borrowings Maturities Table (De
Borrowings Maturities Table (Details) $ in Thousands | Jun. 30, 2019USD ($) |
Debt Instrument [Line Items] | |
Less than 1 Year | $ 822,696 |
1-2 Years | 21,507 |
2-3 Years | 0 |
3-4 Years | 0 |
4-5 Years | 0 |
Thereafter | 5,618 |
Total | 849,821 |
Other borrowings: | |
Debt Instrument [Line Items] | |
Less than 1 Year | 25,931 |
1-2 Years | 133 |
2-3 Years | 0 |
3-4 Years | 0 |
4-5 Years | 0 |
Thereafter | 0 |
Total | 26,064 |
Federal Home Loan Bank borrowings: | |
Debt Instrument [Line Items] | |
Less than 1 Year | 796,765 |
1-2 Years | 21,374 |
2-3 Years | 0 |
3-4 Years | 0 |
4-5 Years | 0 |
Thereafter | 5,618 |
Total | $ 823,757 |
Borrowing Arrangements Narrativ
Borrowing Arrangements Narrative (Details) | 6 Months Ended | |
Jun. 30, 2019USD ($)Oustanding_Letters_of_Creditcredit_lineagreementRate | Dec. 31, 2018USD ($) | |
Line of Credit Facility [Line Items] | ||
Federal Home Loan Bank borrowings with variable interest rate, face amount | $ 270,000,000 | |
Number of credit lines maintained by the Company | credit_line | 3 | |
Federal funds purchased | $ 18,000,000 | $ 28,000,000 |
Federal Home Loan Bank borrowings, additional funding available | 1,260,000,000 | |
Letters of Credit, Federal Home Loan Bank, as collateral | 0 | |
Securities sold under repurchase agreements | $ 8,100,000 | 8,800,000 |
Maturity of repurchase agreements (less than) | 13 months | |
Frost Bank | ||
Line of Credit Facility [Line Items] | ||
Line of credit, maximum borrowing capacity | $ 40,000,000 | |
Line of credit, capacity available for issuance of letters of credit | $ 5,000,000 | |
Number of outstanding letters of credit | Oustanding_Letters_of_Credit | 0 | |
TIB - The Independent Bankers Bank | ||
Line of Credit Facility [Line Items] | ||
Line of credit, maximum borrowing capacity | $ 15,000,000 | |
Comerica Bank | ||
Line of Credit Facility [Line Items] | ||
Line of credit, maximum borrowing capacity | $ 7,500,000 | |
Minimum | ||
Line of Credit Facility [Line Items] | ||
Federal Home Loan Bank borrowings interest rates | 1.37% | |
Federal Home Loan Bank borrowings maturities | 2 days | |
Maximum | ||
Line of Credit Facility [Line Items] | ||
Federal Home Loan Bank borrowings interest rates | 4.799% | |
Federal Home Loan Bank borrowings maturities | 9 years | |
Variable Rate Advance Agreements | ||
Line of Credit Facility [Line Items] | ||
Federal Home Loan Bank borrowings with variable interest rate, face amount | $ 310,000,000 | $ 310,000,000 |
Three-Month London Interbank Offered Rate (LIBOR) | Variable Rate Advance Agreements | ||
Line of Credit Facility [Line Items] | ||
Federal Home Loan Bank borrowings, description of variable rate basis | three-month LIBOR | |
Three-Month London Interbank Offered Rate (LIBOR) | Variable Rate Advance Agreements | Maximum | ||
Line of Credit Facility [Line Items] | ||
Debt Instrument, Number Of Variable Rate Advance Agreements | agreement | 3 | |
Cash flow hedging | Variable Rate Advance Agreements | ||
Line of Credit Facility [Line Items] | ||
Federal Home Loan Bank borrowings with variable interest rate, face amount | $ 270,000,000 | |
Debt Instrument, Interest Rate During Period | Rate | 1.58% | |
Derivative, Average Remaining Maturity | 4 years 3 months 18 days |
Long-term Debt Other Long-term
Long-term Debt Other Long-term Obligations (Details) - USD ($) | 6 Months Ended | |||||||
Jun. 30, 2019 | Dec. 31, 2018 | Oct. 10, 2007 | Aug. 10, 2007 | Aug. 08, 2007 | ||||
Debt Instruments [Abstract] | ||||||||
Subordinated notes, net of unamortized debt issuance costs: | [1] | $ 98,490,000 | $ 98,407,000 | |||||
Trust preferred subordinated debentures | [2] | 60,248,000 | 60,246,000 | |||||
Total long-term debt | 158,738,000 | 158,653,000 | ||||||
5.50% Subordinated Notes | ||||||||
Debt Instruments [Abstract] | ||||||||
Subordinated notes, net of unamortized debt issuance costs: | [1],[3] | 98,490,000 | 98,407,000 | |||||
Unamortized Debt Issuance Expense | 1,500,000 | 1,600,000 | ||||||
Southside Statutory Trust III, net of unamortized debt issuance costs [Member] | ||||||||
Debt Instruments [Abstract] | ||||||||
Trust preferred subordinated debentures | [2],[4] | 20,556,000 | 20,554,000 | |||||
Unamortized Debt Issuance Expense | 63,000 | 65,000 | ||||||
Southside Statutory Trust IV | ||||||||
Debt Instruments [Abstract] | ||||||||
Trust preferred subordinated debentures | 23,196,000 | [2] | 23,196,000 | [2] | $ 23,196,000 | |||
Southside Statutory Trust V | ||||||||
Debt Instruments [Abstract] | ||||||||
Trust preferred subordinated debentures | 12,887,000 | [2] | 12,887,000 | [2] | $ 12,887,000 | |||
Magnolia Trust Company I | ||||||||
Debt Instruments [Abstract] | ||||||||
Trust preferred subordinated debentures | $ 3,609,000 | [2] | $ 3,609,000 | [2] | $ 3,609,000 | |||
Minimum | 5.50% Subordinated Notes | ||||||||
Debt Instruments [Abstract] | ||||||||
Long-term debt, remaining maturity, greater than | 1 year | |||||||
[1] | This debt consists of subordinated notes with a remaining maturity greater than one year that qualify under the risk-based capital guidelines as Tier 2 capital, subject to certain limitations. | |||||||
[2] | This debt consists of trust preferred securities that qualify under the risk-based capital guidelines as Tier 1 capital, subject to certain limitations. | |||||||
[3] | The unamortized discount and debt issuance costs reflected in the carrying amount of the subordinated notes totaled approximately $1.5 million at June 30, 2019 and $1.6 million at December 31, 2018 . | |||||||
[4] | The unamortized debt issuance costs reflected in the carrying amount of the Southside Statutory Trust III junior subordinated debentures totaled $63,000 at June 30, 2019 and $65,000 at December 31, 2018 . |
Long-term Debt LT Debt Interest
Long-term Debt LT Debt Interest Rates (Details) - USD ($) $ in Thousands | Sep. 29, 2021 | Sep. 19, 2016 | Oct. 10, 2007 | Aug. 10, 2007 | Aug. 08, 2007 | Sep. 04, 2003 | Jun. 30, 2019 | Dec. 31, 2018 | |||
Debt Instrument [Line Items] | |||||||||||
Other long-term debt | [1] | $ 60,248 | $ 60,246 | ||||||||
5.50% Subordinated Notes | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Amount issued | $ 100,000 | ||||||||||
Stated interest rate | 5.50% | ||||||||||
Southside Statutory Trust III | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Amount issued | $ 20,619 | ||||||||||
Other long-term debt | [1],[2] | 20,556 | 20,554 | ||||||||
Southside Statutory Trust III | Three-Month London Interbank Offered Rate (LIBOR) | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Basis on variable rate | 2.94% | ||||||||||
Southside Statutory Trust IV | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Other long-term debt | $ 23,196 | 23,196 | [1] | 23,196 | [1] | ||||||
Southside Statutory Trust IV | Three-Month London Interbank Offered Rate (LIBOR) | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Basis on variable rate | 1.30% | ||||||||||
Southside Statutory Trust V | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Other long-term debt | $ 12,887 | 12,887 | [1] | 12,887 | [1] | ||||||
Southside Statutory Trust V | Three-Month London Interbank Offered Rate (LIBOR) | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Basis on variable rate | 2.25% | ||||||||||
Magnolia Trust Company I | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Other long-term debt | $ 3,609 | $ 3,609 | [1] | $ 3,609 | [1] | ||||||
Magnolia Trust Company I | Three-Month London Interbank Offered Rate (LIBOR) | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Basis on variable rate | 1.80% | ||||||||||
Scenario, Forecast | 5.50% Subordinated Notes | Three-Month London Interbank Offered Rate (LIBOR) | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Basis on variable rate | 4.297% | ||||||||||
[1] | This debt consists of trust preferred securities that qualify under the risk-based capital guidelines as Tier 1 capital, subject to certain limitations. | ||||||||||
[2] | The unamortized debt issuance costs reflected in the carrying amount of the Southside Statutory Trust III junior subordinated debentures totaled $63,000 at June 30, 2019 and $65,000 at December 31, 2018 . |
Employee Benefit Plans (Details
Employee Benefit Plans (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Defined Benefit Pension Plan | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Service cost | $ 394 | $ 390 | $ 710 | $ 774 |
Interest cost | 919 | 839 | 1,827 | 1,696 |
Expected return on assets | (1,511) | (1,622) | (3,015) | (3,242) |
Net loss amortization | 470 | 372 | 913 | 756 |
Prior service (credit) cost amortization | (4) | (4) | (7) | (7) |
Net periodic benefit cost (income) | 268 | (25) | 428 | (23) |
Defined Benefit Pension Plan Acquired | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Service cost | 0 | 0 | 0 | 0 |
Interest cost | 43 | 41 | 84 | 82 |
Expected return on assets | (73) | (72) | (146) | (145) |
Net loss amortization | 0 | 0 | 0 | 0 |
Prior service (credit) cost amortization | 0 | 0 | 0 | 0 |
Net periodic benefit cost (income) | (30) | (31) | (62) | (63) |
Restoration Plan | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Service cost | 110 | 84 | 170 | 147 |
Interest cost | 195 | 165 | 356 | 298 |
Expected return on assets | 0 | 0 | 0 | 0 |
Net loss amortization | 181 | 248 | 280 | 339 |
Prior service (credit) cost amortization | 1 | 2 | 3 | 3 |
Net periodic benefit cost (income) | $ 487 | $ 499 | $ 809 | $ 787 |
Derivative Financial Instrume_3
Derivative Financial Instruments and Hedging Activities - Schedule Of Derivative Instruments (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 | |
Asset Derivative | |||
Gross derivatives | $ 8,964 | $ 11,594 | |
Offsetting derivative assets | (2,350) | (2,201) | |
Cash collateral received/posted | 0 | (8,306) | |
Net derivatives included in the consolidated balance sheets | [1] | 6,614 | 1,087 |
Liability Derivative | |||
Gross derivatives | 10,072 | 3,320 | |
Offsetting derivative liabilities | (2,350) | (2,201) | |
Cash collateral received/posted | (7,420) | 0 | |
Net derivatives included in the consolidated balance sheets | [1] | 302 | 1,119 |
Financial Institution Counterparties | |||
Liability Derivative | |||
Net credit exposure | 0 | 0 | |
Financial Institution Counterparties | Designated as Hedging Instrument | Cash Flow Hedging | Interest Rate Swap | |||
Derivatives, Fair Value [Line Items] | |||
Notional Amount | [2] | 270,000 | 270,000 |
Asset Derivative | |||
Gross derivatives | 2,334 | 9,388 | |
Liability Derivative | |||
Gross derivatives | 3,442 | 457 | |
Financial Institution Counterparties | Designated as Hedging Instrument | Fair Value Hedging [Member] | Interest Rate Swap | |||
Derivatives, Fair Value [Line Items] | |||
Notional Amount | [2] | 0 | 21,100 |
Asset Derivative | |||
Gross derivatives | 0 | 0 | |
Liability Derivative | |||
Gross derivatives | 0 | 657 | |
Financial Institution Counterparties | Not Designated as Hedging Instrument | Interest Rate Swap | |||
Derivatives, Fair Value [Line Items] | |||
Notional Amount | [2] | 110,699 | 93,967 |
Asset Derivative | |||
Gross derivatives | 16 | 1,119 | |
Liability Derivative | |||
Gross derivatives | 6,614 | 1,087 | |
Customer Counterparties | |||
Liability Derivative | |||
Net credit exposure | 6,600 | 1,100 | |
Customer Counterparties | Not Designated as Hedging Instrument | Interest Rate Swap | |||
Derivatives, Fair Value [Line Items] | |||
Notional Amount | [2] | 110,699 | 93,967 |
Asset Derivative | |||
Gross derivatives | 6,614 | 1,087 | |
Liability Derivative | |||
Gross derivatives | $ 16 | $ 1,119 | |
[1] | Net derivative assets are included in other assets and net derivative liabilities are included in other liabilities on the consolidated balance sheets. Included in the fair value of net derivative assets and net derivative liabilities are credit valuation adjustments reflecting counterparty credit risk and our credit risk. We had no credit exposure related to interest rate swaps with financial institutions and $6.6 million related to interest rate swaps with customers at June 30, 2019 . We had no credit exposure related to interest rate swaps with financial institutions and $1.1 million related to interest rate swaps with customers at December 31, 2018 . The credit risk associated with customer transactions is partially mitigated as these are generally secured by the non-cash collateral securing the underlying transaction being hedged. | ||
[2] | Notional amounts, which represent the extent of involvement in the derivatives market, are used to determine the contractual cash flows required in accordance with the terms of the agreement. These amounts are typically not exchanged, significantly exceed amounts subject to credit or market risk and are not reflected in the consolidated balance sheets. |
Derivative Financial Instrume_4
Derivative Financial Instruments and Hedging Activities - Weighted Average Remaining Maturity, Lives, and Rates of Interest Rate Swaps (Details) - Interest Rate Swap - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2019 | Dec. 31, 2018 | ||
Financial Institution Counterparties | Not Designated as Hedging Instrument | |||
Derivative [Line Items] | |||
Notional Amount | [1] | $ 110,699 | $ 93,967 |
Remaining Maturity (in years) | 11 years 7 months 6 days | 11 years 7 months 6 days | |
Weighted Average Receive Rate | 2.42% | 2.36% | |
Weighted Average Pay Rate | 2.57% | 2.58% | |
Financial Institution Counterparties | Cash Flow Hedging | Designated as Hedging Instrument | |||
Derivative [Line Items] | |||
Notional Amount | [1] | $ 270,000 | $ 270,000 |
Remaining Maturity (in years) | 4 years 3 months 18 days | 4 years 9 months 18 days | |
Weighted Average Receive Rate | 2.44% | 2.45% | |
Weighted Average Pay Rate | 1.58% | 1.58% | |
Financial Institution Counterparties | Fair Value Hedging [Member] | Designated as Hedging Instrument | |||
Derivative [Line Items] | |||
Notional Amount | [1] | $ 0 | $ 21,100 |
Remaining Maturity (in years) | 7 years 6 months | ||
Weighted Average Receive Rate | 0.00% | 2.56% | |
Weighted Average Pay Rate | 0.00% | 3.00% | |
Customer Counterparties | Not Designated as Hedging Instrument | |||
Derivative [Line Items] | |||
Notional Amount | [1] | $ 110,699 | $ 93,967 |
Remaining Maturity (in years) | 11 years 7 months 6 days | 11 years 7 months 6 days | |
Weighted Average Receive Rate | 2.57% | 2.58% | |
Weighted Average Pay Rate | 2.42% | 2.36% | |
[1] | Notional amounts, which represent the extent of involvement in the derivatives market, are used to determine the contractual cash flows required in accordance with the terms of the agreement. These amounts are typically not exchanged, significantly exceed amounts subject to credit or market risk and are not reflected in the consolidated balance sheets. |
Derivative Financial Instrume_5
Derivative Financial Instruments and Hedging Activities - Narrative (Details) | 12 Months Ended | |
Dec. 31, 2017contract | Jun. 30, 2019USD ($) | |
Derivative [Line Items] | ||
Debt instrument, face amount | $ 270,000,000 | |
Cash collateral held by a counterparty to a master netting agreement | $ 7,400,000 | |
Interest Rate Swap | ||
Derivative [Line Items] | ||
Derivative, instruments terminated | contract | 2 |
Fair Value Measurement - Recur
Fair Value Measurement - Recurring and Nonrecurring Basis (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Securities available for sale, at estimated fair value | $ 2,088,787 | $ 1,989,436 | |
Derivative assets | [1] | 6,614 | 1,087 |
Derivative liabilities | [1] | 302 | 1,119 |
State and political subdivisions | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Securities available for sale, at estimated fair value | 528,855 | 716,601 | |
Other stocks and bonds | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Securities available for sale, at estimated fair value | 2,959 | 2,709 | |
Residential MBS | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Securities available for sale, at estimated fair value | [2] | 1,318,986 | 732,972 |
Commercial MBS | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Securities available for sale, at estimated fair value | [2] | 237,987 | 537,154 |
Fair Value, Recurring [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Equity investments | 5,948 | 5,791 | |
Total asset fair value measurements | 2,103,699 | 2,006,821 | |
Total liability fair value measurements | 10,072 | 3,320 | |
Fair Value, Recurring [Member] | State and political subdivisions | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Securities available for sale, at estimated fair value | 528,855 | 716,601 | |
Fair Value, Recurring [Member] | Other stocks and bonds | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Securities available for sale, at estimated fair value | 2,959 | 2,709 | |
Fair Value, Recurring [Member] | Residential MBS | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Securities available for sale, at estimated fair value | [3] | 1,318,986 | 732,972 |
Fair Value, Recurring [Member] | Commercial MBS | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Securities available for sale, at estimated fair value | [3] | 237,987 | 537,154 |
Fair Value, Recurring [Member] | Interest Rate Swap | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Derivative assets | 8,964 | 11,594 | |
Derivative liabilities | 10,072 | 3,320 | |
Fair Value, Recurring [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Equity investments | 5,948 | 5,791 | |
Total asset fair value measurements | 5,948 | 5,791 | |
Total liability fair value measurements | 0 | 0 | |
Fair Value, Recurring [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) | State and political subdivisions | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Securities available for sale, at estimated fair value | 0 | 0 | |
Fair Value, Recurring [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) | Other stocks and bonds | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Securities available for sale, at estimated fair value | 0 | 0 | |
Fair Value, Recurring [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) | Residential MBS | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Securities available for sale, at estimated fair value | [3] | 0 | 0 |
Fair Value, Recurring [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) | Commercial MBS | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Securities available for sale, at estimated fair value | [3] | 0 | 0 |
Fair Value, Recurring [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) | Interest Rate Swap | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Derivative assets | 0 | 0 | |
Derivative liabilities | 0 | 0 | |
Fair Value, Recurring [Member] | Significant Other Observable Inputs (Level 2) | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Equity investments | 0 | 0 | |
Total asset fair value measurements | 2,097,751 | 2,001,030 | |
Total liability fair value measurements | 10,072 | 3,320 | |
Fair Value, Recurring [Member] | Significant Other Observable Inputs (Level 2) | State and political subdivisions | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Securities available for sale, at estimated fair value | 528,855 | 716,601 | |
Fair Value, Recurring [Member] | Significant Other Observable Inputs (Level 2) | Other stocks and bonds | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Securities available for sale, at estimated fair value | 2,959 | 2,709 | |
Fair Value, Recurring [Member] | Significant Other Observable Inputs (Level 2) | Residential MBS | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Securities available for sale, at estimated fair value | [3] | 1,318,986 | 732,972 |
Fair Value, Recurring [Member] | Significant Other Observable Inputs (Level 2) | Commercial MBS | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Securities available for sale, at estimated fair value | [3] | 237,987 | 537,154 |
Fair Value, Recurring [Member] | Significant Other Observable Inputs (Level 2) | Interest Rate Swap | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Derivative assets | 8,964 | 11,594 | |
Derivative liabilities | 10,072 | 3,320 | |
Fair Value, Recurring [Member] | Significant Unobservable Inputs (Level 3) | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Equity investments | 0 | 0 | |
Total asset fair value measurements | 0 | 0 | |
Total liability fair value measurements | 0 | 0 | |
Fair Value, Recurring [Member] | Significant Unobservable Inputs (Level 3) | State and political subdivisions | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Securities available for sale, at estimated fair value | 0 | 0 | |
Fair Value, Recurring [Member] | Significant Unobservable Inputs (Level 3) | Other stocks and bonds | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Securities available for sale, at estimated fair value | 0 | 0 | |
Fair Value, Recurring [Member] | Significant Unobservable Inputs (Level 3) | Residential MBS | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Securities available for sale, at estimated fair value | [3] | 0 | 0 |
Fair Value, Recurring [Member] | Significant Unobservable Inputs (Level 3) | Commercial MBS | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Securities available for sale, at estimated fair value | [3] | 0 | 0 |
Fair Value, Recurring [Member] | Significant Unobservable Inputs (Level 3) | Interest Rate Swap | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Derivative assets | 0 | 0 | |
Derivative liabilities | 0 | 0 | |
Fair Value, Nonrecurring [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Foreclosed assets | 1,069 | 1,206 | |
Impaired loans | [4] | 32,148 | 37,813 |
Total asset fair value measurements | 33,217 | 39,019 | |
Fair Value, Nonrecurring [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Foreclosed assets | 0 | 0 | |
Impaired loans | [4] | 0 | 0 |
Total asset fair value measurements | 0 | 0 | |
Fair Value, Nonrecurring [Member] | Significant Other Observable Inputs (Level 2) | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Foreclosed assets | 0 | 0 | |
Impaired loans | [4] | 0 | 0 |
Total asset fair value measurements | 0 | 0 | |
Fair Value, Nonrecurring [Member] | Significant Unobservable Inputs (Level 3) | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Foreclosed assets | 1,069 | 1,206 | |
Impaired loans | [4] | 32,148 | 37,813 |
Total asset fair value measurements | $ 33,217 | $ 39,019 | |
[1] | Net derivative assets are included in other assets and net derivative liabilities are included in other liabilities on the consolidated balance sheets. Included in the fair value of net derivative assets and net derivative liabilities are credit valuation adjustments reflecting counterparty credit risk and our credit risk. We had no credit exposure related to interest rate swaps with financial institutions and $6.6 million related to interest rate swaps with customers at June 30, 2019 . We had no credit exposure related to interest rate swaps with financial institutions and $1.1 million related to interest rate swaps with customers at December 31, 2018 . The credit risk associated with customer transactions is partially mitigated as these are generally secured by the non-cash collateral securing the underlying transaction being hedged. | ||
[2] | All mortgage-backed securities issued and/or guaranteed by U.S. government agencies or U.S. government-sponsored enterprises. | ||
[3] | All mortgage-backed securities are issued and/or guaranteed by U.S. government agencies or U.S. government-sponsored enterprises. | ||
[4] | Impaired loans represent collateral-dependent loans with a specific valuation allowance. Losses on these loans represent charge-offs which are netted against the allowance for loan losses. |
Fair Value Measurement - Balan
Fair Value Measurement - Balance Sheet Grouping (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Carrying Amount | ||
Financial assets: | ||
Cash and cash equivalents | $ 132,521 | $ 120,719 |
Investment securities: | ||
Held to maturity, at carrying value | 3,018 | 3,083 |
Mortgage-backed securities: | ||
Held to maturity, at carrying value | 144,073 | 159,848 |
Federal Home Loan Bank stock, at cost | 44,718 | 32,583 |
Equity investments | 6,426 | 6,302 |
Loans, net of allowance for loan losses | 3,435,438 | 3,285,780 |
Loans held for sale | 1,812 | 601 |
Financial liabilities: | ||
Deposits | 4,479,256 | 4,425,030 |
Other borrowings | 26,064 | 36,810 |
Federal Home Loan Bank borrowings | 823,757 | 719,065 |
Subordinated notes, net of unamortized debt issuance costs | 98,490 | 98,407 |
Trust preferred subordinated debentures, net of unamortized debt issuance costs | 60,248 | 60,246 |
Estimated Fair Value | ||
Financial assets: | ||
Cash and cash equivalents | 132,521 | 120,719 |
Investment securities: | ||
Held to maturity, at carrying value | 3,054 | 3,046 |
Mortgage-backed securities: | ||
Held to maturity, at carrying value | 148,253 | 156,735 |
Federal Home Loan Bank stock, at cost | 44,718 | 32,583 |
Equity investments | 6,426 | 6,302 |
Loans, net of allowance for loan losses | 3,493,559 | 3,251,923 |
Loans held for sale | 1,812 | 601 |
Financial liabilities: | ||
Deposits | 4,478,936 | 4,417,902 |
Other borrowings | 26,064 | 36,810 |
Federal Home Loan Bank borrowings | 825,450 | 708,904 |
Subordinated notes, net of unamortized debt issuance costs | 98,964 | 97,611 |
Trust preferred subordinated debentures, net of unamortized debt issuance costs | 58,819 | 54,729 |
Estimated Fair Value | Level 1 | ||
Financial assets: | ||
Cash and cash equivalents | 132,521 | 120,719 |
Investment securities: | ||
Held to maturity, at carrying value | 0 | 0 |
Mortgage-backed securities: | ||
Held to maturity, at carrying value | 0 | 0 |
Federal Home Loan Bank stock, at cost | 0 | 0 |
Equity investments | 0 | 0 |
Loans, net of allowance for loan losses | 0 | 0 |
Loans held for sale | 0 | 0 |
Financial liabilities: | ||
Deposits | 0 | 0 |
Other borrowings | 0 | 0 |
Federal Home Loan Bank borrowings | 0 | 0 |
Subordinated notes, net of unamortized debt issuance costs | 0 | 0 |
Trust preferred subordinated debentures, net of unamortized debt issuance costs | 0 | 0 |
Estimated Fair Value | Level 2 | ||
Financial assets: | ||
Cash and cash equivalents | 0 | 0 |
Investment securities: | ||
Held to maturity, at carrying value | 3,054 | 3,046 |
Mortgage-backed securities: | ||
Held to maturity, at carrying value | 148,253 | 156,735 |
Federal Home Loan Bank stock, at cost | 44,718 | 32,583 |
Equity investments | 6,426 | 6,302 |
Loans, net of allowance for loan losses | 0 | 0 |
Loans held for sale | 1,812 | 601 |
Financial liabilities: | ||
Deposits | 4,478,936 | 4,417,902 |
Other borrowings | 26,064 | 36,810 |
Federal Home Loan Bank borrowings | 825,450 | 708,904 |
Subordinated notes, net of unamortized debt issuance costs | 98,964 | 97,611 |
Trust preferred subordinated debentures, net of unamortized debt issuance costs | 58,819 | 54,729 |
Estimated Fair Value | Level 3 | ||
Financial assets: | ||
Cash and cash equivalents | 0 | 0 |
Investment securities: | ||
Held to maturity, at carrying value | 0 | 0 |
Mortgage-backed securities: | ||
Held to maturity, at carrying value | 0 | 0 |
Federal Home Loan Bank stock, at cost | 0 | 0 |
Equity investments | 0 | 0 |
Loans, net of allowance for loan losses | 3,493,559 | 3,251,923 |
Loans held for sale | 0 | 0 |
Financial liabilities: | ||
Deposits | 0 | 0 |
Other borrowings | 0 | 0 |
Federal Home Loan Bank borrowings | 0 | 0 |
Subordinated notes, net of unamortized debt issuance costs | 0 | 0 |
Trust preferred subordinated debentures, net of unamortized debt issuance costs | $ 0 | $ 0 |
Fair Value Measurement Narrativ
Fair Value Measurement Narrative (Details) | 6 Months Ended |
Jun. 30, 2019source | |
Available-for-sale Securities [Member] | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Number of third party sources used to validate prices | 2 |
Derivative [Member] | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Number of third party sources used to validate prices | 3 |
Income Taxes - Provision for I
Income Taxes - Provision for Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Income Tax Disclosure [Abstract] | ||||
Current income tax expense | $ 3,553 | $ 667 | $ 6,564 | $ 3,012 |
Deferred income tax expense | 16 | 2,693 | 142 | 2,438 |
Income tax expense | $ 3,569 | $ 3,360 | $ 6,706 | $ 5,450 |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |||||
Deferred tax liability, net | $ 5,029,000 | $ 5,029,000 | $ 0 | ||
Net deferred tax assets | 9,800,000 | ||||
Deferred tax assets, valuation allowance | 0 | 0 | $ 0 | ||
Income tax expense | $ 3,569,000 | $ 3,360,000 | $ 6,706,000 | $ 5,450,000 | |
Effective income tax rate, percent | 16.10% | 14.30% | 15.20% | 13.00% |
Leases - Narrative (Details)
Leases - Narrative (Details) | 6 Months Ended |
Jun. 30, 2019ft² | |
Lessee, Lease, Description [Line Items] | |
Building Acquired, Number of Square Feet | 202,000 |
Number of Square Feet Occupied | 41,000 |
Minimum | |
Lessee, Lease, Description [Line Items] | |
Lessee, Operating Lease, Remaining Lease Term | 4 months |
Maximum | |
Lessee, Lease, Description [Line Items] | |
Lessee, Operating Lease, Remaining Lease Term | 19 years 10 months 24 days |
Lessee, Operating Lease, Option to Extend | 10 years |
Lessee, Operating Lease, Option to Terminate | 2 years |
Leases - Balance Sheet Informat
Leases - Balance Sheet Information (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Leases [Abstract] | ||
Operating lease right-of-use assets | $ 9,812 | $ 0 |
Operating lease liabilities | $ 10,204 | $ 0 |
Leases - Components of Lease Ex
Leases - Components of Lease Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended |
Jun. 30, 2019 | Jun. 30, 2019 | |
Leases [Abstract] | ||
Operating lease cost | $ 395 | $ 789 |
Leases - Supplemental Cash Flow
Leases - Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended |
Jun. 30, 2019 | Jun. 30, 2019 | |
Leases [Abstract] | ||
Operating cash flows from operating leases | $ 360 | $ 700 |
Right-of-use assets obtained in exchange for new operating lease liabilities | $ 654 | $ 654 |
Leases - Weighted Average Lease
Leases - Weighted Average Lease Information (Details) | Jun. 30, 2019Rate |
Leases [Abstract] | |
Weighted average remaining lease term | 12 years 6 months |
Weighted average discount rate | 3.88% |
Leases - Future Operating Lease
Leases - Future Operating Lease Obligations (Details) - USD ($) $ in Thousands | 6 Months Ended | ||
Jun. 30, 2019 | Dec. 31, 2018 | ||
Leases [Abstract] | |||
Lessee, Operating Lease, Lease Not Yet Commenced, Payments, Due | $ 9,100 | ||
2019 (excluding the six months ended June 30, 2019) | 625 | ||
2020 | 1,338 | ||
2021 | 1,232 | ||
2021 | 1,193 | ||
2023 | 1,044 | ||
2024 and thereafter | 7,866 | ||
Total lease payments | [1] | 13,298 | |
Less: Interest | (3,094) | ||
Present value of lease liabilities | $ 10,204 | $ 0 | |
Lessee, Operating Lease, Not Yet Commenced, Lease Term | 20 years 4 months 24 days | ||
[1] | Excludes $9.1 million of lease payments for a lease executed but not yet commenced. Lease will commence in 2020 with a lease term of 20.4 years . |
Leases - Rental Income (Details
Leases - Rental Income (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended |
Jun. 30, 2019 | Jun. 30, 2019 | |
Lessor, Operating Lease, Description [Abstract] | ||
Gross rental income | $ 742 | $ 1,487 |
Leases - Future Operating Lea_2
Leases - Future Operating Lease Receivable (Details) $ in Thousands | Jun. 30, 2019USD ($) |
Leases [Abstract] | |
2019 (excluding the six months ended June 30, 2019) | $ 1,388 |
2020 | 2,693 |
2021 | 1,576 |
2022 | 1,553 |
2023 | 1,316 |
2024 and thereafter | 4,098 |
Total lease payments | $ 12,624 |
Off-Balance-Sheet Arrangement_3
Off-Balance-Sheet Arrangements, Commitments and Contingencies (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | ||
Financial instruments with off-balance-sheet risk, at fair value | $ 1,051,497 | $ 901,995 |
Commitments to extend credit | ||
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | ||
Financial instruments with off-balance-sheet risk, at fair value | 1,024,034 | 874,557 |
Standby letters of credit | ||
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | ||
Financial instruments with off-balance-sheet risk, at fair value | $ 27,463 | $ 27,438 |
Off-Balance-Sheet Arrangement_4
Off-Balance-Sheet Arrangements, Commitments and Contingencies Narrative (Details) - USD ($) | Jun. 30, 2019 | Dec. 31, 2018 | Jun. 30, 2018 |
Securities: | |||
Unsettled trades to purchase securities | $ 38,569,000 | $ 6,378,000 | $ 2,279,000 |
Unsettled trades to sell securities | 0 | 0 | |
Deposits: | |||
Unsettled Issuances of Brokered CDs | $ 0 | $ 15,236,000 |
Uncategorized Items - sbsi10-q0
Label | Element | Value |
Additional Paid-in Capital [Member] | ||
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Adjusted Balance | us-gaap_StockholdersEquityIncludingPortionAttributableToNoncontrollingInterestAdjustedBalance1 | $ 757,439,000 |
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Adjusted Balance | us-gaap_StockholdersEquityIncludingPortionAttributableToNoncontrollingInterestAdjustedBalance1 | 762,470,000 |
Common Stock [Member] | ||
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Adjusted Balance | us-gaap_StockholdersEquityIncludingPortionAttributableToNoncontrollingInterestAdjustedBalance1 | 47,307,000 |
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Adjusted Balance | us-gaap_StockholdersEquityIncludingPortionAttributableToNoncontrollingInterestAdjustedBalance1 | 47,253,000 |
Treasury Stock [Member] | ||
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Adjusted Balance | us-gaap_StockholdersEquityIncludingPortionAttributableToNoncontrollingInterestAdjustedBalance1 | (47,105,000) |
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Adjusted Balance | us-gaap_StockholdersEquityIncludingPortionAttributableToNoncontrollingInterestAdjustedBalance1 | $ (93,055,000) |